DLF\'s net debt up at over Rs 19,000 crore

1st August, 2014

$DLF\'s net debt up at over Rs 19,000 crore$

New Delhi: Realty giant DLF's net debt has increased by Rs 538 crore during the quarter ended June to Rs 19,064 crore due to capital expenditure and operational cost.

Net debt of the country's largest real estate firm rose to Rs 19,064 crore as on June 30 from Rs 18,526 crore as on March 31 this year, according to an analysts presentation.

DLF, which yesterday reported 29 percent fall in net profit at Rs 127.77 crore for the April-June quarter of this fiscal, said that of the total, Rs 240 crore of rise in net debt is attributable to capex, land and government charges and the rest to operations.

On the current outlook, DLF said it would aim to "keep the net debt range bound (+/- Rs 500 crore)" through divestments of land. It will target more CMBSs (Commercial Mortgage Backed Securities) in this fiscal to improve the quality of debt.

During the first quarter, DLF had completed the first CMBS issue in India. It privately placed CMBS of DLF Emporio and DLF Promenade amounting to Rs 900 crore with institutional debt investors such as mutual funds and insurance companies.

Earlier, sources had said that DLF plans to raise about Rs 3,500 crore through CMBSs of its office properties.

In medium term, DLF said the attributable net debt to RentCo (commercial arm) will continue to increase as RentCo EBITDA rises. "Target is to make DevCo (residential arm) debt free," the presentation said.

On sales bookings, the presentation said the company achieved 0.38 million sq ft of gross sales worth Rs 308 crore during April-June period, against 0.44 million sq ft worth Rs 310 crore in the previous quarter.

"Sales volume in most geographies shall continue at a moderate pace similar to FY14. As market improves, the company shall monetise this mature stock worth Rs 4,000 crore," the presentation said.

DLF would focus more on selling more mature stock in existing projects rather than launching new projects.

In RentCo, leasing of 0.71 million sq ft was achieved in Q1 of FY'15 versus 0.59 million sq ft during Q4 of FY'14. Annuity income stood at Rs 525 crore.

DLF raised Rs 240 crore in the first quarter of 2014-15 fiscal through sale of non-core assets.

Since last three years, DLF has been selling non-core assets/businesses to focus on core real estate venture and reduce debt. It has sold luxury hospitality chain Amanresorts, insurance and wind energy ventures.

"The company expects the market conditions to be challenging and demanding in the short term. Whilst the company believes that the slowdown is bottoming out, it will take a couple of quarters for the ground situation to improve," DLF had said in a statement late yesterday.