Shares of Mumbai-based real estate developer Godrej Properties saw a notable gain of over 2%, reaching an intra-day high of Rs 2,903 on the NSE, following the company’s announcement of a Qualified Institutional Placement (QIP) to raise up to Rs 6,000 crore.
This marks the company’s strategic move to sell up to 5.5% of its equity, or approximately 1.54 crore shares, at an indicative price of Rs 2,595 per share.
Details of the Qualified Institutional Placement (QIP)
The company has officially launched the Rs 6,000 crore QIP, with a floor price set at Rs 2,727.44 per share, which represents a 5% discount compared to the indicative price of Rs 2,595. The price is lower than the floor price set during the company’s previous fundraising exercise, according to sources familiar with the development.
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Godrej Properties plans to raise up to Rs 4,000 crore through the sale of equity shares, fully convertible debentures, partly convertible debentures, non-convertible debentures, preference shares, or other eligible securities, including any permissible method under applicable law.
Approval and Structure of the QIP
The QIP was approved by the company’s Board and shareholders via a special resolution passed in October 2024. The company may offer a discount of up to 5% on the floor price for the issue, which was confirmed in a statement filed with both stock exchanges.
The raised funds could be raised in one or more tranches through public or private offerings, including a Qualified Institutional Placement (QIP), rights issue, Further Public Offer (FPO), or any other method permitted by law.
Debt Levels and Financial Position
As of the June quarter, Godrej Properties reported a net debt of Rs 7,432 crore, marking an increase from Rs 6,198 crore in the previous quarter and Rs 5,298 crore at the same time last year.
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The company’s increased debt levels highlight the need for fresh capital infusion, which the QIP aims to address.
Market Reaction and Stock Performance
While the announcement triggered a brief rally, shares of Godrej Properties closed 2.4% lower at Rs 2,831.00 on Wednesday. The stock has seen a nearly 5% decline so far this month but has gained 6% this week,
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