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Sunday, July 15, 2007

Shriram Properties mulls Rs 900-cr IPO plan

Shriram Properties, the Rs 450-crore Bangalore-based real estate arm of the Shriram Group, is planing to raise Rs 900 crore through an initial public offering (IPO) in the current financial year.

Prior to the issue, the company is looking to raise around Rs 350 crore through the private equity (PE) route and is understood to be in talks with global PE players such as Blackstone, Sun-Apollo and two more funds. Sun-Apollo is a joint venture between the US-based Apollo and the Khemka family.

A spokesperson for Shriram Properties confirmed the plans for PE funding and the IPO issue.

The decade-old firm currently has over 1,200 acres of land, predominantly in Bangalore and Chennai, and has been focussing primarily on residential projects.

The company, in the recent past, has also diversified into development of malls. In Bangalore, the company is undertaking five residential projects worth Rs 800 crore.

According to sources, the private equity funding is expected to come directly to the company and will not be routed into a project-specific special purpose vehicle (SPV). Shriram is hoping to wrap up the deal by next month.

In fact, Sun-Apollo is understood to have invested substantially into an SPV, which Shriram Properties created in 2006 for an integrated complex in Chennai, reports Business Standard.

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