Unitech closes 2nd QIP; raises $275m

Unitech, the second-biggest realtor according to market capitalisation, is on course to close its second qualified institutional placement (QIP) to raise $275 million, sources said.

Though the developer planned to raise $500 million, it is only raising $275 million. This is the second time that Unitech is being lucky with raising money. It had raised $325 million in April.

Another realtor Sobha Developers’ QIP had failed to garner interest from investors on Monday.

Sources said the developer was expecting the QIP to close by 9 pm on Friday. Once the $275 million QIP is closed and the money is raised, the stake of the promoters—Chandra family—would go down by 8% to 43%.

However, recently the promoters had said they would invest a total of Rs 1,100 crore over the next 18 months in the company, which would increase their stake to 48% over a period of time. The Chandras are expected to initially pay 25%, or Rs 271 crore, as the first tranche in the next couple of weeks.

“The investor interest in the QIP was extremely good, as soon the books opened the QIP was subscribed by one time, that is the whole $275 million,” a source close to the transaction told DNA.

The funds raised would be partly used to pay off debt and rest would be used to fund existing and project launches, primarily in the affordable housing segment.

Unitech had roped in UBS, Morgan Stanley, Credit Suisse and IDFC-SSKI as bankers for the deal. This time around several investors are from the US and Europe for the QIP compared to major investment from Singapore investors in the earlier QIP.

In April, Unitech raised $325 million (Rs 1,600 crore) from investors such as The Government of Singapore Investment Corporation, HSBC, Prudential of UK, Orient Global and Sandstone Capital through a QIP of 42 crore shares.