Godrej Properties, based in Mumbai
, has seen its net debt decrease by 24% to Rs 1,470 crore during the second quarter of the current fiscal year. This reduction was primarily achieved through funds raised via a rights issue.
Previous Quarter Comparison
At the end of the first quarter, the company's net debt stood at Rs 1,650 crore. The current figure represents the lowest it has been in the past two years. Additionally, the borrowing cost has dropped both year-on-year and quarter-on-quarter to approximately 11.8%.
Debt-to-Equity Ratio
Godrej Properties' debt-to-equity ratio, which was 2:1 at the end of the 2011 calendar year and 1.1:1 at the end of the first quarter of this financial year, has now come down to a little over 0.5:1, according to the transcript of Godrej's conference call with analysts.
Rights Issue Details
The rights issue, which was oversubscribed, raised Rs 720 crore, making it India's largest rights issue in the first half of the current financial year. This capital has strengthened the company's balance sheet and enhanced its ability to add value-accretive new projects in key markets. According to sources, part of the funds will also be utilized to add new projects.
Promoter Confidence
Godrej Properties revealed that 75% of the rights issue capital came from promoters, highlighting their confidence in the company's growth prospects.
Market Presence
Godrej Properties is present in 12 cities across India with about 90 million sq ft of potential developable area.