Puravankara Projects revises IPO issue price

Unstable markets have prompted Puravankara Projects, a Bangalore-based real estate company, to revise its initial public offer price from Rs 500-525 per share to Rs 400-450 per share and extend the closing date by five days to August 8.

The company will now be raising Rs 850 crore (Rs 8.5 billion) at the lower end and Rs 956 crore (Rs 9.56 billion) at the higher end, against the original plan to raise Rs 1,073 crore (Rs 10.73 billion) and Rs 1,171 crore (Rs 11.71 billion), respectively.

"We are revising our issue price keeping in mind the volatility in global financial markets and also to respect investor sentiments," said Girish Puravankara, deputy managing director, Puravankara Projects.

Puravankara aims to use the IPO proceeds to repay debt of Rs 419 crore (Rs 4.19 billion) and expend Rs 360 crore (Rs 3.60 billion) towards land acquisition.

The company is issuing 2.14 crore equity shares at a face value of Rs 5 each through the book building route. DSP Merrill Lynch, Citigroup Global Markets and Kotak Mahindra Capital were lead managers.

This is the second instance of an IPO being extended and repriced because of market volatility. In May 2006, the Deccan Aviation issue was repriced. The range was Rs 300-325 and the issue was repriced at Rs 200-250.

Market volatility is also taking its toll on the issues that are to be listed next week. Real estate company Omaxe is due for listing in the middle of next week and bankers to the issue said that "if the market doesn't remain volatile, investors in the company will get decent returns."