Parsvnath Developers gains on plan to trim debt

Parsvnath Developers rose 2.48% to Rs 120 at 15:20 IST on reports the company plans to sell as much as $100 million of shares and a stake in a real estate project.

Meanwhile, the BSE Sensex was down 104 points, or 0.67%, to 15385.29.

On BSE, 2.61 lakh shares were traded in the counter as against an average daily volume of 7.58 lakh shares in the past one quarter.

The stock hit a high of Rs 121.60 and a low of Rs 118.20 so far during the day. The stock had hit a 52-week high of Rs 130.30 on 31August 2009 and a 52-week low of Rs 30.55 on 23 March 2009.

The stock had underperformed the market over the past one month till 2 September 2009, falling 3.14% as compared to the Sensex 1.29% decline. It outperformed the market in past one quarter, gaining 16.63% as against 3.98% rise in the Sensex.

The mid-cap real estate developer has an equity capital of Rs 184.70 crore. Face value per share is Rs 10.

The current price of Rs 120 discounts the company's Q1 June 2009 annualised EPS of Rs 3.02, by a PE multiple of 39.73.

Parsvnath Developers's chairman Pradeep Jain was quoted by media as saying that the company aims to sell shares to institutional investors by the end of October 2009, and a stake in a housing project this month to a private equity fund. Mr Jain, however, did not provide additional details on the project stake, or the amount to be raised.

In June this year, the company is reported to have got Rs 90 crore from private equity firm Red Fort Capital for a stake in a New Delhi housing project.

According to reports, Parsvnath, which expects to get about Rs 5000 crore from sale of homes over 24 to 30 months, aims to trim its debt to Rs 500 crore by March 2009. As of 30 June 2009, the company's debt stood at Rs 1700 crore, due for repayment by March 2011.

Parsvnath Developers' net profit fell 80.5% to Rs 13.93 crore on a 70.6% decline in sales to Rs 107.26 crore in Q1 June 2009 over Q1 June 2008.

Parsvnath Developers is engaged in developing real estate. It includes township development, construction of retail shopping malls, hospitals, hotels and clubs.

Promoters have pledged 10.36 crore shares or 56.12% stake of the company. Total promoter shareholding in the company is 80.33% (as on 30 June 2009).