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Tuesday, March 20, 2007

Deccan Infrastructure plans to raise Rs 2000cr via IPO

Deccan Infrastructure & Land Holdings (DILH), a subsidiary of Andhra Pradesh Housing Board (APHB), is planning to raise up to Rs 2,000 crore through an IPO, subject to regulatory clearances.

“We are looking to divest 15-20% equity in the company some time in June or July if everything works out well,” S N Mohanty, chairman and housing commissioner, Andhra Pradesh Housing Board, said.

The Government of Andhra Pradesh holds 49% equity and the APHB 51% in DILH which is into the development of integrated townships and urban infrastructure either on its own or through JVs with other public bodies and private-sector companies. The draft red herring prospectus is being whetted by the auditors PriceWaterhouse Cooper and managers to the issue and merchant bankers JM Morgn Stanley, DSP Merrill Lynch and SBI Capital Markets.

Based on the track record of its parent and armed with a land bank of about 8,000 acres that is conservatively valued at over Rs 12,000 crore, Mohanty is expecting the valuation for the premium issue would be quite aggressive.

While property consultants Trammell Crow Meghraj and Cushman Wakefield are carrying out a valuation exercise on the land bank, the APHB’s balance sheet itself should provide the Deccan Infrastructure IPO a premium pricing, says Mohanty.

Over the past three years, the APHB has been instrumental in the construction of 50,000 dwelling units across the state, including houses in the government’s initiative for lower income group, Rajiv Gruha Kalpa Scheme.

The APHB is now taking up a massive exercise to create additional housing for the middle-income groups in the state at rates 25% lower than the market, reports DNA Money.

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