Sold 1% equity on Tuesday to fund land buy: HDIL's Wadhawan

Written By Unknown on Rabu, 23 Januari 2013 | 18.00

The shares of Housing Development & Infrastructure ( HDIL ) cracked as much as 15.8 percent on Wednesday after vice chairman and managing director Sarang Wadhawan offloaded partial stake in the company. He sold 5 million shares worth 570 million rupees in secondary markets on Tuesday, reducing his stake to 0.99 percent from 2.19 percent.

"We are aiming at debt reduction; this move was primarily to fund the land acquisition we had entered into about a year back," Wadhwan explained to CNBC-TV18. No details were shared about this land purchase but the company expects this acquisition to add substantial value.

HDIL's debt currently stands at Rs 4000 crore, but the company is confident of reducing it significantly in quarters ahead.

"The debt is already coming down. We have started receiving approvals from various authorities, the funds which were tied up with other developers who we had sold the Floor Space Index (FSI) too have started coming in," he added.

Below is the edited transcript of Sarang Wadhawan's interview with CNBC-TV18.

Q: What is the reason behind the huge crack that we are seeing in the stock price today?

A: Yesterday a sell of almost 5 million shares had taken place under my own name. This was primarily so that the promoters can fund an acquisition which the company had entered into about a year back. This was one of the payment tranches which was due.

Since the company is on the mode of debt reduction over the last six months the promoters thought fit that we should fund the company to make sure that the land acquisition goes through. It is an opportunity which has presented itself over the last year. We assured that over the next quarter we will be disclosing the entire details of this acquisition.

Q: How much of the total promoter holding has been sold?

A: 1 percent has been sold.

Q: Have you sold anything in today's trade?

A: No, nothing whatsoever. This was primarily only to support HDIL, so that HDIL can go ahead and close out the acquisition which it had envisaged for the next quarter. The opportunity presented itself over the last year and the promoters have stood by the company as always.

Q: What about the debt situation? It currently stands at Rs 4,000 crore or so. Are there any plans to pare off the debt?

A: The debt is already coming down. We have started receiving approvals from various authorities, the funds which were tied up with other developers who we had sold the Floor Space Index (FSI) too have started coming in. I am sure this quarter end you will see that debt figure will be substantially reduced.



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