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Godrej Properties Raised ₹6,000 Crore Through QIP

Updated on: Dec 3, 2024, 3:09 PM IST
The QIP of ₹6,000 Crore received overwhelming demand, with subscriptions approximately 4 times the size.
Godrej Properties Raised ₹6,000 Crore Through QIP
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Godrej Properties Limited (GPL), a prominent national real estate developer, has successfully raised ₹6,000 crore through the Qualified Institutional Placement (QIP) route. The offering received overwhelming demand, with subscriptions approximately 4 times the size of the QIP. The issue was fully covered by long-only demand from a mix of prominent international and domestic investors, including GIC, BlackRock, Aberdeen, Norges Bank, SBI Pension, and ICICI Prudential Life Insurance.

Following the QIP, Godrej Properties’ net worth has increased by over 50%, significantly enhancing its financial position. The equity dilution resulting from the QIP stands at 7.68%, reinforcing investor confidence while maintaining a strong equity base.

Strategic Use of QIP Proceeds

The net proceeds from the QIP will be utilized to expand and strengthen Godrej Properties’ project pipeline, enabling rapid business growth in the coming years. GPL has already surpassed its business development guidance for FY25, achieving an estimated booking value of INR 20,000 crore in just the first 7 months of the year. The company remains on track with strong visibility for the remainder of the year.

Impact on Godrej Properties Financials

As a result of the funds raised, Godrej Properties’ gearing ratio will improve substantially, dropping from 0.7:1 as of September 30, 2024, to below 0.2:1. This reduced gearing ratio positions the company for better financial flexibility and lower risk going forward.

Godrej Properties has witnessed remarkable growth in bookings in recent years, with an increase of 56% in FY23, 84% in FY24, and 90% in H1 FY25. This growth trajectory places the company in a strong position to exceed its FY24 booking value guidance of ₹27,000 crore.

Leadership in the Real Estate Sector

Godrej Properties continues to be the largest real estate developer in India by bookings in FY25 and the fastest-growing large business across sectors in India, achieving a sales growth rate of 84% in FY24. This robust performance highlights its leadership and dominance in the Indian real estate market.

Role of Financial Institutions in the QIP

Leading financial institutions such as Jeffries, Morgan Stanley, Bank of America, and Kotak acted as the bankers for the successful QIP, contributing to the smooth execution and substantial demand for the offering.

Commenting on the fundraise, Mr Pirojsha Godrej, Executive Chairperson, Godrej Properties Limited, said: “We are delighted with the response to our QIP process. We greatly appreciate the confidence and support of the investment community and will do our best to ensure we utilize this capital wisely.

He further added, “Godrej Properties has reset its scale in recent years with bookings growth of 56% in FY 23 and 84% in FY 24. GPL is well positioned to deliver a 3rd consecutive year of rapid growth in booking value with 90% growth in H1 bookings, launches planned across 7 cities in Q3, and an even stronger launch pipeline for Q4. This capital raise will allow GPL to significantly enhance its business development portfolio while maintaining a tremendously strong balance sheet. We remain focused on building scale through continued market share gains and margin expansion.”

On December 03, 2024, Godrej Properties shares opened at ₹2,968.55 and touched the day low of ₹2,844.10, indicating a fall of ~2% from the previous close.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

Published on: Dec 3, 2024, 12:14 PM IST

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