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GIC to acquire 33.34% stake in DLF rental arm

Singapore sovereign wealth fund GIC has agreed to acquire a 33.34% stake in developer DLF’s rental arm, DLF Cyber City Developers (DCCDL) for USD 1.39 billion (Rs 8,900 crore). In addition, DCCDL will also buyback Rs 3,000 crore of preference shares held by promoters in two instalments.

DLF will get Rs 11,900 crore from the real estate deal. The proceeds will go to the Singh family, the promoters of the group. The company will utilise funds to reduce the DLF’s debt. DLF had consolidated net debt of Rs 25,898 crore as of end-June.

Post completion of the steps of the transaction, DLF will hold 66.66% equity shares (up from 60% on a fully-diluted basis earlier) and Reco Diamond, an affiliate of GIC Real Estate, Singapore, will hold 33.34% equity shares in DCCDL.

The transaction was approved at the DLF board meeting late on Friday. This is one of the largest private equity transactions in India in the real estate space.

The transaction will create one of the leading platform play for rental properties, with rent yielding assets of 26.9 million-square-foot (msf). The portfolio, currently, has an under development pipeline of approximately 2.5 msf with further development potential of approx 19 msf within the portfolio.