Unitech to go for $1.5 billion QIP

Board has already given nod for the issuance of 200 million shares.

In the largest-ever qualified institutional placement (QIP) by Indian corporates, real estate developer Unitech is expected to raise $1.5 billion (Rs 6,000 crore) through the QIP route in a couple of months. The QIP was expected in the first quarter of 2008, sources said.

The company’s board has already given approval for the issuance of 200 million shares to increase the paid-up share capital of the company, Unitech told exchanges on December 7. With a total share capital of 1,623.37 million, the company could dilute upto 12 per cent in the company.

If the company does a QIP of Rs 6,000 crore at today’s closing price of Rs 516, the dilution could be in the range of six to seven per cent, sources said.

In the previous major QIPs, GMR Infrastructure raised nearly Rs 3,965.52 crore ($1 billion) last month and wind energy company Suzlon raised nearly Rs 2,182.70 crore last year.

When contacted, company executives said: “We have already received shareholders’ approval for a QIP and we are considering the same. However, we have not finalised anything,” he said.

According to sources, the company is expected to use the QIP proceeds for its upcoming projects and telecom foray, which it is planning in all 22 telecom circles of the country. Unitech is also foraying into Mumbai real estate market with an investment of Rs 4,000 crore.

Unitech has several business segments relating to residential, commercial, IT parks, retail, amusement parks and hotels.

According to its annual report for 2006-07, it has 50 million square feet of ongoing projects. The company is also planning to build 50 malls across the country with an investment of Rs 20,000 crore.

Unitech has raised over Rs 3,100 crore (360 million POUND) on the Alternative Investment Market (AIM) of the London Stock Exchange through its arm Unitech Corporate Parks Plc (UCP).

Unitech is also considering to float a Real Estate Investment Trust (Reit) in an overseas market to raise $2-3 billion (about Rs 8,000-12,000 crore) to meet its expansion plans.

The company’s shares closed at Rs 516.95, down 1.54 per cent over yesterday’s close of Rs 525.05.

source