Fund raising gets easier; Unitech to infuse Rs 1,000-crore
Thursday 21 May 2009 - All stories compiled and edited by Bhaswati Das
Raising funds from the bourses will soon become a simpler, faster process, as the market regulator plans an overhaul of existing norms. Cash-strapped Unitech, received the approval of its board to raise additional long term funds by issuing securities.
According to an official close to the development, the Securities & Exchange Board of India (Sebi) will rework the norms for instruments such as qualified institutional placements (QIPs), initial public offers (IPOs) and rights issues to enable companies to raise capital quickly, mitigating the risks arising out of sudden changes in market sentiment.
The promoters of Unitech plan to raise their stake through conversion of warrants worth Rs 1,000-crore over the next 18 months, as they look to shore up their shareholding in the real estate company that has slipped to 51 percent. Unitech’s board approved the issue of warrants to the promoters ‘on preferential basis’. It has also approved the company’s plan to raise additional long-term funds. The company will seek shareholders’ approval for these plans in a general meeting, likely to be held on June 16, 2009.
Indiabulls Real Estate raised $550-million by selling shares, while realty giant, DLF, raised $783-million by selling promoters' stake. Realty developer Sobha Developers is also set to raise long term capital during the current fiscal (FY10).
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