DLF eyes Rs 1000 cr via commercial mortgage

DLF to raise Rs.2100 Cr through IPP.

DLF's Debt Reduction Strategy Through Retail Asset Mortgage

India's largest real estate company, DLF, has unveiled plans to secure approximately ₹1000 crore by leveraging its retail assets as mortgage collateral. This strategic move is anticipated to be finalized by the end of November and is central to the company's overarching debt reduction initiative. DLF intends to implement a pioneering Commercial Mortgage Backed Security (CMBS) approach focused on two of its prominent malls located within the National Capital Region. This marks the inaugural introduction of such a product within the Indian real estate market.

Addressing Financial Challenges

DLF currently grapples with a substantial net debt burden of ₹19,508 crore, incurring finance costs amounting to ₹600 crore during the September quarter. The real estate giant is diligently finalizing the design and development protocols for this innovative CMBS product, specifically tailored to these two retail properties. The company has extended invitations to a diverse range of investors, including pension funds, insurance companies, and international stakeholders, to participate in this groundbreaking venture. DLF believes that the product’s success will herald a new era for the company’s financial trajectory.

A Novel Financial Instrument

The planned security is projected to achieve a higher rating compared to DLF's overall corporate rating. This enhancement not only extends the debt maturity timeframe but also optimizes cash flow dynamics, promising interest cost savings for the corporation. Initial implementation of the product will include the two identified retail assets. Provided with positive initial results, DLF intends on expanding the scope of this financial strategy on a larger scale. The company further anticipates that the establishment of this novel instrument can further contribute to an improvement in its corporate credit ratings.