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Monday, June 11, 2007

Godrej Properties to raise Rs 400-600-cr via IPO

Godrej Properties, which is presently developing 2-crore sq.ft of real estate space across the country, will go for an IPO to offload ten per cent of its equity, expected to fetch Rs 400-600-crore for fuelling its expansion plans.

"We will be offloading 10% in the second-half of this fiscal. Currently, Godrej Industries owns 82% stake while the family, 18% in the company," Godrej Group Chairman, Adi Godrej, told media on Sunday.

With the offloading, Godrej Industries' holding will come down to 75% and the family's to around 15%, Godrej said, adding that merchant bankers would be appointed shortly. "We are in discussions with 3-4 of them and a decision will be taken very soon," he said, without revealing their identities.

While Godrej declined to reveal the issue size, saying "it is too early to talk about this", industry sources feel the issue could be anywhere between Rs 400 and Rs 600-crore. While not totally ruling out any pre-equity placements, Godrej, however, said that it was not on the radar presently.

Elaborating on the company's expansion plans, Godrej said property development would be a thrust area for the group and in five years Godrej Properties could emerge as the largest player within the group.

As a part of its expansion plans, Godrej Properties is eyeing new markets such as Chennai, Kochi, the National Capital Region (NCR) and Goa. The company is presently active in Mumbai, Pune, Kolkata, Bangalore and Hyderabad. Godrej said that one-third of the real estate development was residential while the rest was commercial which included offices, IT parks and malls.

The company is presently engaged in the development of the tallest residential towers in the country comprising of of 50-storeys. Five such towers are being built in the posh Mahalakshmi area of Mumbai, he said, adding "of course, taller towers are now being planned in places like Hyderabad."

On the proposed repealing of the Urban Land Ceiling Act by the Maharashtra Government in the near future, Godrej expected it to greatly benefit property development in the already-congested metropolis as vast areas of land would get released for development.

He said that both the Centre and practically all states barring Maharashtra, Andhra Pradesh and West Bengal had repealed the Act. Calling for the immediate scrapping of both the Urban Land Ceiling Act and octroi, Godrej said that their continuation severely handicapped the economic progress of the state. "It is high time Maharashra abolished them," he said, reports The Economic Times.

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