NEW DELHI: DLF Ltd could be looking at a new business model where it will build and complete residential projects before selling apartments in them once the deal by its promoters to sell 40% stake in the company's rental arm for Rs 12,000-14,000 crore goes through, two people with knowledge of plans said.

DLF had said last week that the promoters would reinvest a substantial amount of money from selling their stake in DLF Cyber City Developers (DCCDL) back into the company after paying tax and other charges.

The sale of promoter stake in DLF’s rental subsidiary and investments of the proceeds in reducing debt is a positive move.

Promoter’s have 40% stake in the rental subsidiary, DLF Cycber City Developers or DCCDL while DLF holds the rest. DLF board last week had accepted the audit committee’s report that the promoters sell their holdings in DCCDL to third party institutional investors.

K P Singh and his family, promoters of India’s largest real estate company, DLF, will sell their 40 per cent stake in the company’s rental arm, DLF Cyber City Developers Ltd (DCCDL), to institutional investors. The stake is estimated to be worth Rs 12,000-14,000 crore.

A decision on the matter was taken at a meeting of the company’s board on Thursday, based on the recommendations of a committee set up to suggest ways to drive growth in the rental business. The business accounts for annual income of about Rs 2,400 crore.

This year could turn out to be a watershed for the country's largest real estate developer, DLF, as it seeks to monetise its huge portfolio of residential and commercial property to raise funds, which will enable it to reduce its debt (Rs 21,600 crore at the end of June) and tackle the slowdown. All told, the company wants to mop up Rs 10,000 crore from strategic sale to private equity.

Earlier this month, DLF announced that it will set up an equally-owned venture with GIC, Singapore's sovereign wealth fund, to develop two residential projects in New Delhi.

Shares of real estate companies have rallied by up to 8% on the bourses after falling sharply in past couple of months.

DLF, Housing Development and Infrastructure (HDIL), Indiabulls Real Estate, DB Realty and Oberoi Realty are up between 5%-8% while Unitech, Godrej Properties, Sobha, Delta Corp, Ashiana and NBCC have gained between 1%-4%.

Singapore wealth fund GIC will invest about Rs 1,990 crore ($300 million) in a new joint venture with real estate developer DLF that will build two projects in the Indian capital New Delhi, the two firms said in a joint statement.

The deal is one of several by GIC in India this year, after its investments in Bandhan Financial Services, which is setting up one of the country's two newest banks, and online taxi-hailing company Ola.

Realty major DLF's stock jumped nearly 5% on Thursday after the anti-trust regulator CCI rejected allegations of anti-competitive practices made against the company related to a project in the national capital.

After opening at Rs 113.55, the stock climbed to a day's high of Rs 116.05, up 4.88% from Wednesday's close.

Shares of DLF were up over 3% at Rs 100, in an otherwise weak market, after the realty major said it has raised Rs 375 crore through issue of non-convertible debentures.

DLF has allotted 12.25% privately placed fully-paid non-convertible debentures of a principal amount of Rs 375 crore (comprising the second tranche out of an overall shelf limit of up to Rs 1,375 crore), redeemable for cash at par in separate series within a period of 4 years 11 months adn 18 days from the date of allotment, the company said in a release.

Bengaluru: DLF Ltd, India’s most valuable property developer, is planning to go slow on fresh project launches and focus on finishing existing projects instead, at a time when homebuyers have lost the confidence to invest in under-construction projects, especially in the National Capital Region (NCR).

The company also plans to partially monetize its rental portfolio by bringing in long-term investors, the company said in an analyst presentation.

Realty major DLF has raised Rs 1,000 crore through issuance of non-convertible debentures as part of its strategy to boost internal cash flows.

The issuance of non-convertible debentures (NCDs) worth Rs 1,000 crore was completed yesterday, sources said.

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