Singapore's GIC planning to buy 50 per cent in DLF's upcoming project in Delhi

The realty major DLF is likely to close a deal with the Singapore government's sovereign fund GIC as early as next week. In this deal, GIC is picking up a 50 per cent stake in one of DLF's upcoming residential projects in Delhi, named Capital Greens for around Rs 2,000 crore. The 25 acre project in the Moti Nagar area of west Delhi, to be called DLF Capital Greens 6, has got all approvals and is likely to be launched in the next few months.

The real estate company was with high debt and slow sales. DLF said at the beginning of the current year that company intends to manage its high debt level through 'tactical divestment's or joint ventures with strategic or financial investors in certain projects.

The company is in talks with GIC and other private equity firms to sell stakes in residential projects in the National Capital Region to raise funds. These two parties are also in talks to plan similar deals for some of the realty major upcoming projects in Chennai and Mohali.

DLF is trying to improve the quality of its debt and to reduce dues to its development company. DLF is also trying from banking or capital markets to access long-tenor debt and is in talks with a few private equity investors, which would reduce the development company's debt. DLF's housing sales will take another 12 months at minimum to improve. 

The company's net debt increased by 25 per cent to 20701.35 crore in FY15 compared to Rs 16583.32 crore in FY14.

In Q1FY16, DLF reported 5 per cent drop in net profit to Rs 121.55 crore against Q1FY15, on higher operational expenses and finance costs. Total revenue rose by 26.7 per cent to Rs 2,345.62 crore from Rs 1,851.6 crore on yearly basis. 

In December, GIC invested Rs 150 crore in a joint venture with real estate firm Vatika group to develop two housing projects in Gurgaon. Last month DLF has sold four acres of land in Kochi for Rs 111 crore. As the company focused on its core real estate business and planned to sell non-core assets to boost cash flows and reduce debt.

Today DLF is trading around 3 per cent higher at Rs 118