260: India's Dev Property readies London IPO
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HONG KONG (Reuters) - Dev Property Development, an Indian real estate firm, said on Tuesday it will raise about $530 million (269 million pounds) through a listing in London, joining a wave of Indian property plays headed to the market.
Dev Property, which will list its shares on London's secondary Alternative Investment Market and use the proceeds to buy minority stakes in three Mumbai development projects, said it will raise up to 316 million pounds if it exercises its over-allotment option.
Investment bankers have high hopes for Indian initial public offerings in 2007, as new listings helped drive India's equity issuance to a record $19.2 billion last year, according to data from Dealogic.
India's real estate market has been booming since officials eased rules on inward investment in the construction industry at the beginning of 2005, unleashing a wave of foreign investor activity and steep hikes in property prices.
Private equity investors are looking to take stakes in Indian firms with ambitions to expand out of their regional bases, while many developers are keen to raise money to fund new projects, leading to a potentially strong flow of IPO activity.
Property developer DLF recently revived a listing plan that could raise more than $2 billion, while a joint venture between Dubai's Emaar Properties (EMAR.DU: Quote, Profile , Research) and India's MGF Developments (MGF.BO: Quote, Profile , Research) plans to raise roughly $2.9 billion, according to a recent report in the Business Standard.
Dev Properties signed an agreement with Indiabulls Financial Services (IBUL.BO: Quote, Profile , Research) earlier this month to subscribe to stakes in various projects.
"The Indian real estate sector is enjoying a period of high demand and the company is well placed to benefit from this momentum and growth," Dev Property Chairman Rishi Khosla said in a statement.
Indian listings have had their problems, however, with shares of Cairn India (CAIL.BO: Quote, Profile , Research) falling as much as 20 percent in their January 9 debut after the Indian arm of British explorer Cairn Energy (CNE.L: Quote, Profile , Research) raised $1.18 billion in an IPO that priced at the bottom of an indicative range.
And many market watchers complain that property companies are overvaluing themselves, especially given the high risks related to development, including red tape and frequent disputes over land title.
For example, many in the industry raised their eyebrows over land valuations used by DLF during its first attempt at launching an IPO last year.
Dev Property will begin its investor roadshow on January 22, and its order books close on January 25, with pricing due for the next day, according to a term sheet.
The company will spend the end of this week doing investor education in Singapore and Hong Kong and on conference calls with investors in London and Europe.
Citigroup, Deutsche Bank and UBS are the deal's bookrunners.
Source:
Reuters.co.uk