Mumbai: Lodha Developers is looking to raise up to $1 billion through an initial public offering (IPO) that is likely to be launched next year, two people with knowledge of the plan told IFR, a Thomson Reuters publication. Stock indices, Sensex and Nifty, have surged almost 30 per cent this year, bolstered by strong foreign inflows, spurring companies to raise a record of more than $11 billion through IPOs so far this year. The company had planned an IPO of Rs 2,800 crore in 2010, but it was shelved due to a weak stock market.
The real estate developer has hired Citic CLSA, Kotak and Morgan Stanley for the IPO, the people said, adding that more banks were likely to join the syndicate, IFR said.
Lodha is currently developing an estimated 43 million square feet of real estate and has 28 ongoing projects across London, Mumbai, Pune, Hyderabad and Bangalore, according to its website. The S&P BSE Realty Index is up 97 percent since the start of the year. Last year, Fitch Ratings downgraded Lodha Developers by a notch due to its inability to reduce debt.
The downgrade reflects Lodha's inability to reduce its leverage, as measured by net debt or adjusted inventory, to a level appropriate for its previous rating. Fitch had also downgraded the long-term rating on Lodha's $200 million senior unsecured notes due in 2020 to 'B' from 'B+'. According to Fitch, the company's leverage had increased to 80 per cent by December 31 last year from 76 per cent at March 31, 2015 and 65 per cent at 2013-14, as the company continued to ramp up the pace of construction in its property projects in spite of lower-than-expected pre-sales and cash collections over the last 12-18 months.
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