DLF set to finally hit the markets

May 08, 2007 Stock Market

Almost 4-5 months after their plans to re-enter the capital markets fell through, DLF has filed a revised draft red herring prospectus with SEBI to raise around Rs.13600 crore.

The company will dilute 10.27% equity, and the issue is likely to hit the markets sometime next month. There is a slight change in the revised offer, as promoter K.P Singh and family are not tendering their shares for this purpose.

The issue had earlier run into rough weather with minority shareholders unhappy with the promoters, alleging foul play during the offer of debentures. The company had approved that once the debentures were issued and fully paid-up, they would be converted into equity shares in the ratio of 10 equity shares of Rs 10 each for every one debenture of Rs 100 each held by them.

This was followed by a stock split of five shares of Rs 2 each for every Rs 10 paid-up share, and a bonus issue of 7 equity shares of Rs 2 each for every share of Rs 2 held after the conversion of the debentures into equity shares and subsequent stock split.

As can be seen, a lot of people would have gained immensely with this move. The company said they had sent letters of offer of debentures to all shareholders, a claim which the minority shareholders hotly contested. Ultimately, their will prevailed and the company was forced to revive the lapsed offer, allowing these minority shareholders to become potential millionaires once the stock is finally listed.