Godrej Properties Launches Rs 4,000-Crore QIP, Sets Floor Price

Godrej Properties Ltd. on Wednesday has set the floor price for its qualified institutional placement. The company is looking to raise Rs 4,000 crore through the QIP, Bloomberg reported, citing terms of the deal.

The company fixed a floor price of Rs 2,727.44 apiece to issue equity shares of face value of Rs 5 each, according to its exchange filing. The floor price is at a discount of nearly 4% to Wednesday's closing price.

Godrej Properties, however, has not given an official statement on this report.

The real estate developer will determine the issue price in consultation with the book-running lead manager.

Godrej Properties in October had approved raising funds worth Rs 6,000 crore by issuing shares and bonds. The firm intends to use the fund to drive growth by increasing capital investment instead of using the funds for sales growth, Managing Director and Chief Executive Officer Gaurav Pandey told NDTV Profit.

“To maintain and capitalise on the market opportunity, we want to look at this purely as growth capital... Frankly, for the next 12–18 months, we have enough and more to deliver on great growth,” he said.

Godrej Properties profit surged over 4.5 times in the second quarter to Rs 333.8 crore, from Rs 72.6 crore in the corresponding quarter of the previous fiscal. Its revenue from operations rose to Rs 1,093 crore, as compared with Rs 343 crore during the same quarter last year.

Operating income, or earnings before interest, taxes, depreciation, and amortisation, stood at Rs 31.9 crore, while the margin stood at 2.91%.

Godrej Properties stock fell as much as 3.30% during the day to Rs 2,806.30 apiece on the NSE. The stock closed 2.34% lower at Rs 2,834.10 per share. This compares with a 0.33% advance in the benchmark Nifty 50. It has risen 54.07% in the last 12 months and 41.56% year-to-date.

Out of 19 analysts tracking the company, 15 maintain a 'buy' rating, one recommends a 'hold,' and three suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 19.7%.