DLF to launch first Reit by current financial year

The country’s largest property developer DLF is working on launching its first real estate investment trust (REIT) by pooling together its office properties by the end of the current financial year.

“Both financial and strategic investors have approached DLF in this regard,” the company said in a presentation. The government has recently issued clarification of minimum alternate tax (MAT), which is expected to give a boost to the launch of REITs.

“With REITs in place, we would want to wind down the debt of our rent company in the next four to five years,” Ashok Tyagi, chief financial officer at DLF, said in a conference call with analysts. As on March 31, 2015, the rent company’s debt was at Rs 14,000 crore.

When asked about the ban on DLF on accessing capital markets, Saurabh Chawla, senior executive director, DLF, said: “There is no ban on DLF from assessing capital markets. In our opinion of legal counsel, even if Supreme Court reinstates the ban, it would be on DLF and not on subsidiaries. REITs would be launched by subsidiaries,” Chawla said.

Capital markets regulator Sebi has imposed ban on DLF and its top executives from accessing the capital markets for three years, for suppressing information in its initial public offering (IPO) prospectus and for sham transactions.

DLF moved Securities Appellate Tribunal, the latter quashed the order, following which Sebi moved Supreme Court on Sebi order.

DLF is also looking to bring in private equity investors to raise as much as Rs 3,000 crore in its upcoming projects.

“The company plans to bring in marquee private equity investors at the project level thereby mitigating market risks whilst sharing financial returns,” the company said.

It is looking at new phases in its existing projects in the current financial year. “It will be pure equity transactions we are planning. It will be joint development,” said Chawla.

DLF has deposited Rs 525 crore with the Supreme Court and will pay the balance by early July to comply with the apex court’s direction to deposit Rs 630 crore fine slapped by fair trade regulator Competition Commission of India.

DLF Ltd