Prestige Estates Projects IPO opens on October 12

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Prestige Estates Projects IPO opens on October 12

South based real estate company Prestige Estates Projects is entering capital market with an initial public offering of Rs 1200 crore on October 12, 2010.

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South based real estate company Prestige Estates Projects is entering capital market with an initial public offering of Rs 1200 crore on October 12, 2010, as per advertisement in newspaper. The issue will close for subscription on October 14.

Issue proceeds are proposed to be used for financing ongoing projects and projects under development; existing subsidiaries which investment will be utilized for the construction and development of commercial ongoing project, retail ongoing and retail projects under development undertaken by subsidiaries; acquisition of land; and for repaying certain loans.

As per draft prospectus filed in November 2009, promoters namely Irfan Razack, Rezwan Razack and Noaman Razack hold 75% stake in company. Their promoter group holds the balance 25%.

This issue has been graded by ICRA as 3/5, indicating average fundamentals.

The issue is being made through the 100% book building process wherein at least 60% of the net issue will be allocated on a proportionate basis to qualified institutional buyers (QIBs). It is provided that the company may allocate up to 30% of the QIB portion, to anchor investors, on a discretionary basis. Further 5% of the QIB portion less anchor investor portion shall be available for allocation on a proportionate basis to mutual funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from them at or above the issue price. Further, not less than 10% of the net issue will be available for allocation on a proportionate basis to non-institutional bidders and not less than 30% of the Net Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Bidders may participate in the Issue through the ASBA process by providing the details of their respective bank accounts in which the corresponding Bid amounts will be blocked by Self Certified Syndicate Banks.

The equity shares are proposed to be listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange of India Limited.

The company and its subsidiaries currently owns or holds development rights for 57.36 million sq. ft. of developable area, which includes 28.43 million sq. ft. of saleable area and 11.04 million sq. ft. of leasable area.

Enam Securities Private Limited, JP Morgan India Private Limited, Kotak Mahindra Capital Company Limited and UBS Securities India Private Limited are book running lead managers to the issue. Link Intime India Pvt Limited is the registrar.