See debt at about Rs 6000-6500cr post QIP issue: Unitech

Realty Major Unitech was looking to raise USD 200-250 million from last months qualified institutional placement but ended up with a demand of over USD 1 billion, the Managing Director Sanjay Chandra, said."We decided on retail issue size at USD 325 million with consent of investors," he said. According to him, investor perception of the company had now changed. "The markets were irrational earlier when they valued the company very highly." The company, he said, had changed its business plan a lot. "The focus was on pricing products in a way that would boost sales. We have now redesigned most of our product portfolio from luxury to affordable. We have reduced apartment sizes and lowered the ticket size of products by 50%. Prices are also down around 25%. The cheapest product in Gurgaon is now around Rs 28-29 lakh versus Rs 70 lakh earlier. So, the worst is over for us. Also, bookings are higher and volumes have improved." Chandra said the company had booked over two million square feet of new residential property in the last 45 days. He said that it was getting difficult to sell land to developers as they had enough of their own. Speaking on the road ahead for the company, Chandra said that margins were likely to come down, but tje return on equity would be faster. "Average realisations for Unitech stand at around Rs 3,000 currently, which we hope to maintain going forward," he said. On the company's debt position, he said that peak debt was Rs 10,500 crore, which had come down to around Rs 8,500 crore. "Around 38% equity is currently pledged by promoters. We hope to reduce debt to around Rs 6,000-6,500 crore after the QIP issue, and plan to bring it down to around Rs 4,000-5,000 crore by H2 FY11." Chandra stated that asset values on the ground had not come down very sharply.