Mumbai: Realty major Godrej Properties on Monday said it will issue equity shares to successful bidders under its institutional placement programme at Rs 575 per share -- the lower end of the price band.
Godrej Properties, part of Godrej Group, would issue up to 81,86,810 shares and at lower band of Rs 575 the company would mop-up Rs 470.75 crore.
In a regulatory filing the company said, the securities Issuance Committee of the Board of Directors of the Company has finalised allocation of equity shares under the Institutional Placement Programme to the successful applicants at Rs 575 a piece.
The real estate company had fixed a price band of Rs 575- 620 per share under its share-sale through the new Institutional Placement Programme (IPP) route.
Shares of the company tanked after the announcement and slid over 4.29 percent to an early low of Rs 632 on the BSE.
The shares however recovered some lost ground and were later trading at Rs 635.30, down 3.83 percent on the BSE at 1048 hours.
Marketmen said the main reason behind the fall in the counter is the allotment of the shares at the lower end of the price band. If the company had alloted the shares it the higher end it could have raised as much as 508 crore trough the share sale programme.
Godrej Properties intends to use the net proceeds of the issue towards prepayment and repayment of existing debt, acquisition of land development rights and general corporate purposes.
As of December 31, 2011, the principal amount of the total outstanding loans on a consolidated basis was about Rs 2,000 crore.
The consolidated income for the nine months ended December 31, 2011 and 2010-11 fiscal was Rs 446.51 crore and Rs 558.91 crore, respectively. In the review period, the profit was Rs 58.12 crore and Rs 130.85 crore, respectively.
Kotak Mahindra Capital Company and UBS Securities are the book running lead managers of the issue.