coimbatore lodha developers limiteds ldl planned ipo initial public offering is credit positive as it will meaningfully reduce debt and improve leverage moodys investors service has said we expect total funds available for debt repayment from the equity raising and offer for sale to amount to around rs 44 billion rs 4400 crore or around 20 of the rs 221 billion rs 22100 crore total debt outstanding inclusive of debt at the london subsidiaries at the end of december 2017 the agency saidthe total funds available for debt repayment comprises around rs 3300 crore of the expected rs 3700 crore proceeds from the fresh issue of shares and around 80 of the offer for sale by the promoters moodys said the promoters intend to use at least 80 of the proceeds from the offer for sale to repay loans given to the shareholders by the company the company intends to use such proceeds towards debt reduction as well it saidonce completed we expect an improvement in leverage as calculated by adjusted debt homebuilding ebitda earnings before interest taxes depreciation and amortization to around 37x 38x multiple for the year ending march 2019 fiscal 2019 pro forma for the ipo from around 53x at fiscal 2017 moodys statedlodha ldl b2 stable a mumbaibased real estate developer filed a draft prospectus with markets regulator sebi to launch an ipo we estimate the total proceeds raised to be around rs 5500 crore and we expect the company to apply a majority of the proceeds for debt reduction the agency saidnotwithstanding the ipo we expect ldls credit metrics to improve as the company has started recognising sales from projects launched in india over the last two to three years it said at the same time beginning in fiscal 2018 ldl will recognise revenue and earnings from its developments in london which will further improve its credit metrics moodys said