Prestige Estates to raise up to Rs 375 cr through IPP

Last Updated: Wed, Jan 23, 2013 20:12 hrs

Prestige Estates Projects, the Bangalore-based publicly-held realtor, may raise up to Rs 375 crore through the Institutional Placement Programme (IPP) to comply with Sebi norms, which call for public float of at least 25 per cent. The promoters hold a little over 80 per cent in the company. The issue will open and close on January 23, 2013, and will be managed by CLSA India and J P Morgan India.

Prestige Estates will offer close to 20 million shares and additional shares of close to 2 million in case of over-subscription in the price band of Rs 161-170 per share. Post this move, the promoters will hold 75 per cent in the company. Prestige Estates has indicated that part of the proceeds would be to pay down its debt of around Rs 1,300 crore.

The company is planning to launch 20 million square feet of residential projects through 2013 compared with the 15 million sft development across assets in 2012. Irfan Razack, CMD, Prestige Group, said, many existing areas in Bangalore were fast approaching saturation driven by the existing challenges including infrastructure constraints. “With the hope that the situation would improve, one can expect increased development in select areas in Bangalore, including townships in Sarjapur, Kanakapura and North Bangalore from Prestige,” Razack added.

On the retail sentiment, Razack said with the new policies supported by the government, the sector would fare well and see renewed growth and energy.

During 2013, Prestige will open several of its retail projects starting with the Forum Vijaya Mall in Chennai, followed by the opening of Forum Sujana in Hyderabad and Forum Mangalore, thus marking its retail expansion across South India.

“On the hospitality front, we will also soon begin operating Oakwood Service Residences in Whitefield and the Aloft Hotel in the ORR, Bangalore,” he said.

In addition to the residential and retail space, the Group has been making significant expansion with sizeable offerings in the commercial leasing market. Driven primarily by the IT/ ITeS sector, the office market has witnessed a steady growth. “We have leased out retail/office spaces of approximately 2.5 million sft in CY12 and target to lease out approximately 3 million sft retailommercial space in CY2013. Several of our retail and commercial projects are under development and we are on track to achieving rental revenues of Rs 500-550 crore by 2015, which should further strengthen and increase our stabilised and sustainable cash flows,” Razack said.

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