Emaar MGF to raise Rs 7,077 cr from IPO

Undeterred by the volatility on the Dalal street, realty major Emaar MGF on Wednesday said it would go ahead with its plan to enter the capital market for raising up to Rs 7,077 crore (Rs 70.77 bilion) through initial public offer.

Emaar MGF, which is a joint venture between Dubai-based Emaar Properties and India's MGF Development, is entering the capital market with an IPO of 10.25 crore (102.5 million) equity shares of Rs 10 each to be determined through a 100 per cent book building.

The issue will open for subscription on February 1 and will close on February 6. The company has fixed the price band at Rs 610-690. At lower end, it would raise Rs 6,257 crore (Rs 62.57 billion).

Asked whether it is considering a delay in launching its IPO or lowering the price band due to volatility in stock market, the firm's executive vice-chairman and managing director Shravan Gupta said: "Based on the response which we have got from the roadshow and the advice from merchant bankers, we believe that this is a reasonably good time to go for an IPO."

The market is better than when the company filed its draft red herring prospectus in September last year, he noted.

Gupta said the company might consider delaying the IPO if Sensex crashes to 13,000-14,000 level, and added, "I don't see that happening". The issue would be the country's third largest IPO after Reliance Power and DLF.

Emaar MGF proposes to utilise the proceeds of the issue worth Rs 2,560 crore (Rs 25.60 billion) towards part payment of land acquisition. Besides, Rs 775 crore (Rs 7.75 billion) would go into development cost of a project in Gurgaon and Rs 1,450 crore (Rs 14.50 billion) in repayments of loan.