Ansal API to garner funds up to Rs46 crore through issue of warrants

15 Feb 2022 , 09:54 AM

Ansal Properties and Infrastructure Limited (referred to as “Ansal API”, one of the oldest and leading real estate developers in Northern India, held a board meeting on the February 11, 2022, to consider the issue and allotment of Warrants to Promoter Group entity and Non-Promoter entity(Public) investors governing the issue of Warrants.

On Tuesday at around 9:53 AM, Ansal Properties & Infrastructure was trading at Rs17.30 apiece down by Rs0.05 or 0.29% on Sensex.

The Board of Directs has considered and approved the issue and allotment of 2,70,00,000 Nos. of Warrants to Promoter Group entity and Non Promoter (Public) investors, which would eventually be converted into Equity share of the Company giving the investors 2,70,00,000 Nos. of Equity shares representing 14.64% of the post issue equity outstanding.

For this, a total of approx. Rs46 crore will be invested through Warrants and shall be utilized for reducing debt and speed up the development on existing projects. Out of the total Investment of approx. Rs46 crore, approx. Rs14.79 crore will be invested by ICP Investments (Mauritius) Limited, a Foreign Venture Capital Investors, against allotment of 87,00,000 Nos. of warrants and balance will be invested by Promoter Group Entity.

According to the filing, the Board also took note of the fact that capital raise has become necessary to expand the permanent capital base as against the debt / working capital. The board also commented that with the changing environment of doing real estate business, company needs to rely more on equity and permanent capital sources. Board also discussed the importance to reduce debt at a much faster pace and eventually become debt free.

Commenting on the outcome of the board meeting, Anoop Sethi, Whole Time Director and CEO of Ansal Properties and Infrastructure Limited said: “The company may raise further capital through various means depending upon the requirement. The decision strengthens the fact that the management continues to focus towards streamlining the operations and reduce the number of projects which are ongoing.

We are committed to reducing the debt at a very fast pace as has been done in the past 12 to 18months by settling debts with various lenders and with such committed efforts, the Company has successfully reduced the consolidated debt by approximately over Rs 500 Crores in past couple of years and will endeavor our efforts to lower the’ debt further bottomward. Since the funds would berequired immediately, therefore the capital raise of approx. Rs. 46 Crores has been structured to ensure the inflow of funds in a short span of time.

With Covid and other market situation, there has been a sluggish response in the recent times in sales and collections and therefore capital raise would provide the necessary impetus to reduce debt of the company. Management has been working tirelessly towards completion of the existing projects and allocate necessary funds to fast track developments of projects which are in the last mile stage.

Further, In India’s residential real estate market, 2021 was a year of recovery and the market conditions has improved with increase in the demand for the residential segment in urban as well as semi-urban areas along with the upward trend in the prices. This has will helped in the growth of this sector, complemented by the growth in the corporate environment too.

Retail, hospitality, and ‘commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs. We expect the robust momentum in the residential markets is expected to continue throughout the 2022 calendar year, with sales likely to reach pre-COVID levels. Also, we have observed an big attrition of families moving from congested / large housing societies to spacious individual plots which has further contributed in the increasing in demand in the residential plotted segment.

This will ensure that customers get their properties and commitments made by the company are fulfilled at the earliest. Capital management in the new age of doing real estate business has become all the more important and sufficient capital raise needs to be done to manage the company affairs efficiently.

The Company will continue to focus on execution of the projects and completing the existing projects, There is focus to complete and deliver real estate products in the best possible timelines.

At this moment, the company does not seek new projects to be undertaken till the current projects are executed and completed. Simultaneously, the Company is also geared up to reduce the debt at a very fast pace to reduce the interest burden and save on cash flows to infuse into the projects.