Prestige Estates stock rises as realtor raises Rs 5,000 crore via QIP; CLSA raises target price

Prestige Estates is one of the leading real estate developers in the country with a presence across six major cities and other urban centres.

Shares of Bengaluru-based Prestige Estates Projects gained on September 6 after the real estate developer informed that it has raised Rs 5,000 crore by selling equity shares to institutional investors through private placement. The company launched the Qualified Institutional Placement (QIP) last week on August 29.

CLSA has given an "outperform" call on Prestige Estates, raising the target price to Rs 2,380 per share. The recent equity fundraising by the company is expected to significantly scale up both its residential and annuity businesses.

CLSA believes that this move addresses the market's concerns regarding growth visibility, while also easing worries about rising debt levels, warranting a re-rating of the stock.

In July, the realtor had taken approval of its shareholders to raise capital by way of public or private offerings including through a QIP to eligible investors through an issuance of equity shares or other eligible securities for an amount not exceeding Rs 5,000 crore.

A Prestige Estates board fundraising committee approved the allocation of 2.98 crore equity shares at an issue price of Rs 1,674 apiece to eligible institutional investors. The issue price was at a discount of 4.62 percent on the floor price of Rs 1,755.09 per share fixed by the panel.

Prestige Estates is one of the leading real estate developers in the country. It has a presence across six major cities and other urban centres. The company has an ongoing and upcoming project portfolio comprising 108 projects across various segments.

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According to the FY24 business portfolio, the company has completed 150 residential projects. Currently, it has 37 ongoing projects and 30 projects under the planning stage.

The company's portfolio is balanced across different assets. In Q1FY25, its sales amounted to Rs 3,030 crore, supported by healthy collections of Rs 2,916 crore. Average realisations increased to Rs 11,934 per square foot for apartments, villas, and commercial spaces, and Rs 7,285 per square foot for plots.

Prestige Estates stock ended 4 percent lower at Rs 1,785 on the National Stock Exchange (NSE) in the previous session. The stock has gained around 50 percent so far this year, outperforming Nifty's returns of 15 percent.

In the past 12 months, the counter has zoomed 181 percent, more than doubling investors' capital. In comparison, Nifty rose 28 percent during this period.

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