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DLF has completed the merger of Caraf Builders & Construction, which owns investment trust DLF Assets Ltd (DAL), with another offshoot DLF Cyber City, a move India’s biggest realtor says is logical to listing DAL on the Singapore Stock Exchange (SGX).

A company spokesman confirmed the development while two senior executives involved in the listing process said DAL, set up to acquire properties from DLF and other developers for leasing out to third parties, is likely to be listed on SGX in the first quarter of 2010-11.

Though DAL’s listing was not dependent on the merger, it was important that the integration with Cyber City, a wholly-owned subsidiary, was completed before the listing as the move is also aimed at further streamlining all commercial assets under one head, said the first executive on condition of anonymity. Under SGX norms, a company planning to list cannot reveal listing plans before its draft prospectus is approved. Merging DAL, which buys and manages commercial assets on the lines of real estate investment trusts, with Cyber City will ringfence DLF from the uncertainties of the property market as it guarantees a steady stream of revenues, said the second executive. DLF acquired Caraf from promoters KP Singh and family last December in a share swap deal and decided to give it a 40% stake in its Cyber City. By consolidating the group’s rental assets, that transaction too was aimed at ensuring a steady cash flow.

The rental business of DLF and Caraf together generated annual incomes of Rs 700 crore and Rs 550 crore in the current fiscal. Post-merger, the rental business is expected to give DLF an annual come of Rs 1,500 crore in 2010-11, which should be 20% of the total income, said the second executive. As the merger is effective from March 19, its effect will not be reflected in the current financial year, he added.

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