DLF's Rental Division Raises Rs 2400 Crore from SBI

Industry Outlook Team | Monday, 19 October 2020

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DLF’s rental division DLF Cyber City Developers Ltd (DCCDL) has raised Rs 2400 crore from SBI to clear its existing debt and infuse capital into expansion plans for the future, according to a senior official from the company. “The debt has been raised at a very attractive interest rate of 7.35 per cent, enabling the company to reduce interest cost,” said Vivek Anand, DLF’s group chief financial officer (CFO) to PTI. DCCDL, the joint venture between DLF and Singapore sovereign fund GIC, has 33 million sq ft of office and retail properties generating an annual rental income of Rs 3,500 crore. DLF holds 66.66 per cent stake in DCCDL while GIC has the rest.

“DCCDL has secured funding of Rs 2,400 crore from India’s largest public sector bank SBI.

It sets a benchmark for lease rental discounting (LRD) in the country,” Anand told PTI. The fund has been raised through the LRD route against a rental portfolio of 2.4 million sq ft area in Cyber City, Gurugram. “It is one of the biggest disbursements by any public sector bank during the COVID-19 pandemic. This also clearly demonstrates our strong tenant profile and ability to generate cash for a long-term period,” said Anand.

When asked about utilization of funds, Anand said DCCDL has refinanced its existing debt worth Rs 1,950 crore while Rs 450 crore will be used for future expansion. At present, DCCDL has a debt of around Rs 19,500 crore. “In the short to medium term, the debt of DCCDL will remain at Rs 20,000 crore level because of our plan to expand portfolio,” Anand said. He noted that the company has chalked out a plan to develop 18 million sq ft of commercial assets, of which 4 million sq ft is already under construction in Chennai and Gurugram.

Anand said the company’s rental income will rise as rent from its Cyber Park project has started accruing from this month. This 2.5 million sq ft project will help it earn Rs 350 crore annually. DLF had formed a joint venture with GIC in December 2017 after its promoters sold their entire 40 per cent stake in the DCCDL for nearly Rs 12,000 crore. This deal included sale of 33.34 per cent stake in DCCDL to GIC for about Rs 9,000 crore and buyback of remaining shares worth about Rs 3,000 crore by the DCCDL. (Source: PTI)