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Thursday, April 05, 2007

Godrej Properties plans IPO to fund expansion

Godrej Properties, the real estate arm of the Rs 6,500-crore Godrej Group, plans to tap the capital market for funds during the current financial year.

Confirming this, Milind Korde, managing director, Godrej Properties, said, “We are in the process of appointing merchant bankers to do a due diligence.”

Godrej Industries owns 81.69% of Godrej Properties.

“We will float an IPO at the right time. We are currently finalising the modalities and will decide the structure very soon,” Korde said. He did not rule out a pre-IPO preferential placement.

Godrej Properties is currently developing properties across several metros. It plans to develop properties admeasuring about 20 million sq ft in Mumbai, Bangalore, Pune, Hyderabad, Kolkata and Chennai. These include residential, IT parks and commercial establishments.

The real estate player plans to convert the IT Park it’s developing at Hyderabad, spread over 6 million sq ft, into an IT-SEZ, Korde said. Godrej Properties had purchased the property on an outright basis from Rallis India, a Tata Group company.

The company is also looking at developing an integrated state-of-the-art township in Mumbai (Kalyan) and Bangalore with an area of 1 million plus sq ft.

Godrej Properties is now shoring up its land bank. “We have entered into MoUs with land owners for acquiring several tracts of land. The process is underway and would materialise very soon,” he said.

Commenting on the rising home loan rates Korde said, “The high rate of interest is a sentimental issue in the short term. However, demand is still high, with salary levels going up.”

Korde said the real estate players need to realise that only a model based on “reasonable pricing with huge volumes” could eventually work, reports DNA Money.

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