Realty major DlF’s promoters have received offers from two big investors for selling their 40 per cent stake in rental business and expect to sign the deal, estimated at Rs12,000-14,000 crore, in next quarter. DlF had announced in October last year that its promoters would sell 40 per cent stake in DlF Cyber City Developers ltd (DCCDl).
They would be reinvesting a significant part of the amount realised from this deal into DlF ltd. India’s largest realty firm DlF holds 60 per cent in DCCDl, while its promoters have the rest. The rental arm holds the bulk of the realty major’s commercial assets, which earn an annual rent of Rs2,700 crore.
“The due diligence exercise has been completed. We have received two offers from marquee investors. The bankers and legal advisors are evaluating and negotiating the offers as well terms and conditions,” DlF’s Senior Executive Director (Finance) Saurabh Chawla told analysts in a conference call. He did not share the valuation offered by the two investors. DlF, which is negotiating the transaction on the behalf of the promoters, expects to sign this deal in next quarter, Chawla said, adding the closure of transaction might flow into the next year for seeking regulatory approvals.
In a presentation, DlF said: “At present, the transaction is running slightly behind our initial estimates. The company shall make all the efforts for an early closure but would like to indicate that there is a possibility that the closing may flow into the next fiscal year.”
On impact of demonetisation, Chawla said since November 8 there has been some slowdown and softness in the market as potential buyers are postponing their decision to purchase homes. However, he expected sales to come back after some deferment and things will be normal in the next 2-3 quarters.
“Both demonetisation and the real estate regulatory law will be beneficial for the economy and the sector. It will establish a level playing field for companies like us. Fly by night operators will be weeded out,” Chawla said. On Friday, DlF reported a flat consolidated net profit at Rs206.09 crore for the second quarter of this fiscal against Rs206.18 crore in the year-ago period.