DUBAI - Emaar MGF, a joint venture between Emaar Properties and India’s MGF Developments, could be looking to raise at least Dh3 billion (Rs40 billion) through an initial public offering, or IPO, the Economic Times reported on Friday. The planned move to go public, is the second attempt in as many years by the company which has ongoing projects ranging from infrastructure to residential and commercial developments. The company withdrew its Dh5 billion IPO in February 2008, after it received lacklustre response from investors amid market turmoil.
A spokesperson for Emaar MGF declined to comment on the report. “Emaar MGF continues to evaluate various funding options to meet its growth plans,” he told Khaleej Times. “However, we are not in a position to comment on the specifics of any of our fund raising plans,” he said. Emaar could not be reached for comment.
The report, citing two unidentified sources, also said that the company has started preliminary discussions with Kotak Mahindra Capital, the investment banking arm of Kotak Mahindra Bank, to manage its public offering.
Indian realty developers have been struggling to raise money to fund their ongoing operations and reduce severe debt burdens. They are stuck with large land banks bought during peak times and a slump in property sales.
However, in recent days, investors have showed renewed interest in real estate sector. The Bombay Stock Exchange Realty Index is up by 120 per cent in the last three months — a sign the investors are betting on a quick recovery.
Recently, large companies such as DLF, Unitech and Sobha Developers have been successful in raising funds by sell shares to institutional investors. These developments might have encouraged the company to restart its IPO plans.
· business@khaleejtimes.com
