Realty firm Sobha Ltd plans to raise up to Rs 700 crore through issue of debentures to meet its funding requirement for execution of real estate projects. The Bengaluru-based developer has sought shareholders' approval for the proposed issue of non-convertible debentures (NCDs) on a private placement basis. In a notice to shareholders for convening the annual general meeting (AGM), the company said that the board is contemplating the feasibility of borrowing money through issue of NCDs. The meeting is scheduled to be held on August 7.
"...consent of the members is being sought to enable the board of directors to offer or invite subscriptions for non-convertible debentures aggregating up to Rs 700 crore," the notice said. Sobha said that the company borrows money from banks and other financial institutions to execute various projects, both residential and contractual. The company has taken project-specific or general purpose borrowings from various banks and financial institutions.
"The board of directors envisages a continued need for the funding requirements of the company to be met through various components, i.e. equity, project loans, general purpose corporate loans, borrowings from financial institutions, debentures etc," it said, adding that a mix of these instruments would result in optimum utilisation of funds at an optimum cost. Meanwhile, Sobha recently reported that its sales bookings increased by 22 per cent to Rs 762.4 crore during the first quarter of this fiscal on higher volume as well as price realisations.
According to its latest operational update, the company sold 9,60,085 sq ft area during April-June quarter of this fiscal, up 18 per cent from 8,15,230 sq ft in the same period of the last financial year. In terms of value, the sales booking stood at Rs 762.4 crore as against Rs 623.4 crore during the period under review. The average sales realisation also rose to Rs 7,941 per sq ft in the first quarter of this fiscal from Rs 7,647 per sq ft in the year-ago period.