Three merchant bankers said on Thursday that India's DLF Ltd (DLF.NS) is considering its first bond issue in three years, amid a resurgence in the country's real estate industry. "The company is engaging with investors and bankers for a bond issue, but it has not firmed up any plans yet," a banker with a private lender said on the condition of anonymity as he is not authorized to speak to the media. "It is difficult to pinpoint the exact timing (of the issue), as the talks are at a very basic stage," the financier said.
According to bankers, DLF may seek to raise roughly 10 billion rupees ($120 million) through the bond offering but has yet to get board clearance for its fundraising plan. They stated that the real estate corporation may seek to raise financing for two to five years. DLF did not respond to an email from Reuters requesting comment. DLF's bonds worth 15 billion rupees have been awarded an 'AA' grade by ICRA. In March 2021, the company raised five billion rupees through the offering of three-year bonds with an annual rate of 8.25 percent.
DLF's expected return to the bond market coincides with the resurgence of India's real estate sector. According to real estate consultancy Anarock, housing sales in India's top seven cities increased 36% year on year in the July-September quarter.
Real estate stocks have skyrocketed, with DLF up about 68% year to date compared to the blue-chip Nifty 50 index's near 11% increase. "The economy is picking up and so is the demand for real estate, which could lead to a rise in fundraising from more such players in the coming months," said one of the bankers.