Prestige Estates Projects stock gains after board greenlights Rs 5,000 crore QIP

The Prestige Estates board also approved the proposal to monetise assets of the hospitality segment through Prestige Hospitality Ventures Limited, wholly owned subsidiary of the Company by way of issue of shares (through primary or secondary or both).

Shares of Prestige Estates Projects gained over 1.5 percent on June 24 as the realty firm plans to raise up to Rs 5,000 crore by selling shares to institutional investors and also monetise its hotel business.

A regulatory filing by the company stated that its board approved "raising of funds by way of issuance of equity shares or other eligible securities for an aggregate amount not exceeding Rs 5,000 crore by way of qualified institutional placement (QIP) or other permissible mode."

The board of Prestige Estate Projects also approved plans to "monetise assets of the hospitality segment through its arm Prestige Hospitality Ventures Ltd, by way of issue of shares (through primary or secondary or both)." All these decisions are subject to the approval of shareholders.

Follow our market blog to catch all the live action

For monetisation of hospitality assets, Prestige Estate Projects' board has formed a sub-committee to oversee and structure the process.

"The committee is tasked with the responsibility of ensuring compliance with all regulatory requirements, coordinating with advisors and underwriters, and making all necessary arrangements," the exchange filing said.

Earlier this month, global brokerage firm CLSA reiterated 'buy' rating on the stock and raised the target price to Rs 2,320 as it pointed out that Prestige Estates' valuations remain discounted compared to peers and expects a continued re-rating, noting that debt concerns were overblown.

"Operational cash flow will significantly support its capex and project pipeline growth," the firm stated.

Elara Securities also has a 'buy ' rating on Prestige Estates with a target price of Rs 2,300 per share. They praised the company for its unique combination of scale, diversity, and market dominance. Prestige Estates Projects is guiding a presales growth of 25 percent YoY in FY25, led by planned launches of Rs 60,000 crore, the brokerage noted.

"This is supported by its dominant position in the home market of Bengaluru, consistently commanding ~10 percent volume market share. We view the company's proven ability to access land via joint development agreements (JDAs) and industry-leading execution pace as key catalysts for accelerating new business development in the residential business," Elara said.

In the quarter ended March 2024, Prestige Estates posted 70 percent on-year decline in consolidated net profit at Rs 140 crore, while total income fell by 31 percent YoY to Rs 2,232 crore.

Also Read | Prestige Estates' board approves raising up to Rs 5,000 crore via QIP

In the previous session, Prestige Estates shares ended nearly one percent lower at Rs 1,995 on the National Stock Exchange (NSE). In the last one year, the stock has gained 244 percent, more than tripling investors' money. In comparison, Nifty delivered returns of around 25 percent during this period.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.