Prestige Estates Projects Ltd. will raise up to Rs 5,000 crore through qualified institutional placement. The company's board approved the proposal on Friday, according to an exchange filing.
The Bengaluru-based real estate developer also plans to monetise assets of the hospitality segment through wholly owned subsidiary Prestige Hospitality Ventures Ltd., by share sale through primary or secondary route. This will be subject to approval of shareholders, market conditions and receipt of applicable approvals.
A sub-committee has been constituted to oversee and structure the process. The committee is tasked with the responsibility of ensuring compliance with all regulatory requirements, coordinating with advisors and underwriters, and making all necessary arrangements, the company said.
The board has given consent for an initial public offer for the hospitality business and the team is working on it, Chairman and Managing Director Irfan Razack told NDTV Profit in April.
Parent Prestige Estates will be the major shareholder in the hospitality arm once it lists, said the chairman. The business size will include the existing inventory as well as the capacity from upcoming projects.
Potential demerger and listing of Prestige's hotel portfolio could aid in managing debt, according to CLSA.
The company is scaling up significantly, targeting rental income to grow five times over the next four years and pre-sales growth of 25-30% per annum, it said. "We believe its operating cash flow will substantially support its capex and project pipeline growth," the brokerage said.
Shares of Prestige Estates Projects closed 1.24% lower at Rs 1,990.7 apiece on Friday, as compared with a 0.35% decline in the benchmark BSE Sensex.
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