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Godrej Properties to raise $129M through rights issue

Godrej Properties Ltd, the real estate company of the Godrej group, has decided to raise Rs 700 crore ($129 million) through a rights issue. The rights issue is expected to hit the market in the second half of the year.

The money will be used to fund expansion and growth for the real estate developer, which added eight new projects in its portfolio in financial year ended March 31, 2013. Of these, five are redevelopment projects spread across Mumbai.

The company’s net profit went up 41 per cent for the year ended March 2013 and stood at Rs 138.4 crore, compared to Rs 97.9 crore in FY12, supported by 35 per cent rise in income which crossed the Rs 1,000 crore mark.

However, its fourth quarter results tell a different story. The company’s total income slid 10.9 per cent to Rs 312 crore over the year-ago period. But net profit in Q4 FY13 stood at Rs 53.2 crore, as against Rs 39.8 crore in the same period last year, led by a decline in expenditure, especially cost of sales.

Pirojsha Godrej, managing director of GPL, said, “We have built considerable launch momentum this year with 13 successful launches across the country including Mumbai, Delhi-NCR, Bangalore, Pune, Ahmedabad and Kolkata.” The company is looking to launch around 15 projects in the coming year.

GPL is also undertaking a stock split where shares of nominal value (Rs 10 each) will be divided into 2 equity shares of Rs 5 each. This will be implemented after the completion of the proposed rights issue.

Godrej Properties’ shares closed at Rs 601.70 a unit, down 2.69 per cent on the Bombay Stock Exchange in a weak Mumbai market on Thursday.

(Edited by Sanghamitra Mandal)

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