Realty IPO fever heating up; Lodha, Oberoi in race

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Realty IPO fever heating up; Lodha, Oberoi in race

With a host of realty initial public offers (IPOs) set to hit the markets, CNBC-TV18’s Priyanka Ghosh reports that realty major Lodha Developers is targeting to raise Rs 2,790 crore in the Draft Red Herring Prospectus (DRHP). Oberoi Constructions, yet another real estate major, too is looking to raise about Rs 1,500 crore.

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With a host of realty initial public offers (IPOs) set to hit the markets, CNBC-TV18's Priyanka Ghosh reports that realty major Lodha Developers is targeting to raise Rs 2,790 crore in the Draft Red Herring Prospectus (DRHP). Oberoi Constructions, yet another real estate major, too is looking to raise about Rs 1,500 crore.

Here is a verbatim transcript of her comments on CNBC-TV18. Also watch the accompanying video.

The Lodha Developers DRHP was filed yesterday. CNBC-TV18 had reported last week that they were going to do this by September 30. What I understand from the DRHP is that the capital raised target is Rs 2,790 crore-that is the exclusive detail we have from the DRHP. The green shoe option remains 10%, which means Lodha will issue 2.5-2.7 crore shares and that is the base issue-that is what we learn from Lodha Developers.

Another DRHP filing that we can expect going forward is Oberoi Constructions and that is looking to raise about Rs 1,500 crore. Morgan Stanley already has a 10% stake in the company which it had picked up in January 2007-that valued the company at Rs 6,570 crore. We understand that Morgan Stanley will remain the lead investor in their IPO issue as well and since then the company has doubled its land bank.

It is a zero-debt company at the moment and it's not surprising that there will be no pre-IPO placement. So the target for valuation for Oberoi Construction is anywhere between Rs. 13,000-15,000 crore. Kotak Mahindra and Enam Securities are likely to be lead book runners along with Goldman Sachs and JP Morgan. We understand that Amarchand Mangaldas is acting as legal advisors and the extent of stake dilution is 10-11% by the promoters. DRHP is expected to be filed within this month.