HDIL Raises Rs 200 Cr Through NCDs

HDIL has raised Rs 200 Cr through NCDs. This debenture is the third tranche out of 11,500 debentures of Rs 1 Mn each aggregating to Rs 1,150 Cr.

HDIL intends to use the funds raised from the issue for the repayment of it’s existing high cost debt.

CARE assigned A+ rating to the debenture issue. Experienced management, extensive land reserves acquired at low cost, its strong execution capabilities, significant presence in high-margin Slum Rehabilitation Projects (SRPs), the inherent revenue potential of Mumbai International Airport Ltd (MIAL) SRP and relatively low repayment obligation were the reasons behind the rating.

Transaction Reference: BS

Housing Development & Infrastructure Ltd. is one of India’s premier real estate companies. It has completed projects cover 100 mn sq. ft. of land and an additional 4.31 mn sq.ft. has been developed under slum rehabilitation schemes. The company has land reserves of 196 Mn sq.ft.

Earlier in the first half of 2009, HDIL borrowed Rs 3,000 Cr from a number of banks including Bank of India, Union Bank of India, Punjab National Bank and Uco Bank mainly for its airport rehabilitation project in Mumbai. The borrowing cost was about 12%. It has a total debt of Rs 3,300 Cr on its books.

HDIL's Recent Fund Raising Activities

All the major real estate companies had borrowed heavily in 2008 and early 2009 expecting a surge in demand for residential and commercial properties, but then, they were hit by the crises in 2009, when the sales slumped to an all time low and the companies struggled to repay the debt. RBI provided them with a lifeline by allowing them to restructure their loans.

All the major real estate companies including Unitech and HDIL restructured their debt. Now as the conditions are easing out, these companies are looking to replace their high cost debt.

Other NCD Issues

Earlier in the day, Hyderabad based realtor – IVR Prime Urban Developers Ltd announced that it has raised Rs 150 Cr through private placement of 1500 secured redeemable NCDs of Rs 10 Lakh each.

DLF has also mandated Axis Bank to raise Rs 100 Cr through NCD for the company. DLF is looking to place NCDs carrying an interest rate of 10.5% for 3 years. It will also use the funds to retire its high cost debt. The company has a net debt of Rs 12,830 Cr.

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