DLF is reported to eye multiple partners to divest 40 per cent stake in its rental arm -DLF Cyber City Developers, to get maximum valuation. At the moment, the company is holding individual bilateral discussions with more than three financial institutions. According to reports, DLF had shortlisted Brookfield Asset Management, Blackstone Group and Singapore wealth fund GIC for doing the needful.
SEBI has relaxed rules and a company can have several firms coming in to initiate competition. DLF will not divest stake to only a single partner. The debt-laden company is looking to shut the transaction before the end of this fiscal year.
The stake sale is anticipated to leave DLF in funds, enabling it to considerably lower its debt which was seen at Rs. 22,120 crore as on June 30. The company had declared plans to dilute stake in the rental arm in October last year. It makes sense for DLF to bring in more partners since it will achieve the aim of getting maximum valuation. They may even divest the 40 per cent stake to two-three players at differential rates. It is also possible that they ask other firms to match the highest bid received.
Meanwhile DLF share price is quoting above 4 per cent at Rs. 145.65. Today’s trading session saw approximately 93,23,423 shares being traded in the counter with a traded volume of 6,245.90 lacs, as per NSE. The stock closed at Rs. 146.15.
Other than Brookfield, Blackstone and GIC, other firms namely -Qatar Investment Authority and Warburg Pincus are still in the race. As per estimates, the 40 per cent stake sale could yield DLF up to Rs. 14,000 crore. The stake sale is anticipated to be followed by raising more equity shares worth Rs. 3,000 crore to make up for the funds lost because of taxes, the source said, further adding that DLF will also look at launching a REIT after this exercise. DLFs debt could slip down to Rs. 6,000 crore after this and could be debt-free in next two years. The completion of the transaction will be an important step to create two pure plays — a residential business with zero debt and an independent commercial business in partnership of long term institutional investors.
The Information Memorandum was generated among the investors in April and several bids were received from sovereign funds and global private-equity firms in June. DLF, in its analyst presentation post the announcement of financial results for first quarter of fiscal year 2016-17, had mentioned that it had allowed shortlisted bidders access to virtual data room and vendor diligence reports. The company had added that it anticipates to receive binding, updated bids in the form of marked up shareholder agreements once the shortlisted bidders execute their due diligence.
DLF share price touched its 52 week high value at Rs. 169.60 on 19th August ’16 whereas the 52 week low value is seen at Rs. 72.35 on 12th Feb ‘16. The company has a market cap amounting to Rs. 24984.19 (Cr) with a book value of Rs. 153.37.
DLF is identified by Dynamic Levels as the top 500 performing stocks for the June quarter amongst the 1700 stocks listed on the NSE. DLF is fundamentally strong and is safe for investment, according to Dynamic analysts.
In order to know more about the support and resistance levels of the stock and also its fundamentals and financials, please a pay a visit to DLF share price history.
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