Delhi-based Unitech has raised Rs2,800 crore ($575 million) after issuing shares and selling them to overseas private equity funds in an effort to increase its equity base, repay debt and launch a series of affordable housing schemes across the country
According to a report by The Times of India, Unitech had previously planned to only raise $200 million but increased the size of the placement in response to investor demand. The report cites a source who suggests there was demand for more than $1 billion in shares. The report added that overseas private equity funds had taken up the shares, though it did not name them.
The placement saw Unitech issue 342 million shares enabling the firm to expand its equity base by about 16.7 percent, although reducing its stake in the company to about 43 percent. Untech had previously raised $325 million in April after selling 421 million shares but a senior official at the firm said this would be its final dilution of company capital.
Unitech will use the equity raised to reduce its current debt position as well as develop a number of affordable housing schemes across the country. The low cost housing sector has taken centre stage of late as that is the area of most demand following the global economic downturn. Prior to that, many developers had concentrated on providing accommodation for the country’s middle classes.