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Tuesday, September 04, 2007

Ansal plans to raise Rs 1,000-cr via follow-on issue

Delhi-based real estate firm Ansal API plans to raise close to Rs 1,000 crore through a follow-on public offer (FPO). The company is also in final stages of striking a USD 250 million private equity (PE) deal with a London-based fund.

Ansal API chairman Sushil Ansal said, “We are close to signing the PE deal and will issue our FPO sometime early next year.” The company plans to use the funds generated for part-financing its ongoing real estate projects and undertaking new projects in hospitality and education sectors.

At present, the company has a 7,000-acres landbank, mostly in north Indian states. Apart from its ongoing real estate projects in these states, Ansal API is also diversifying into Maharashtra and is undertaking an international project in UAE. “Very soon, we will float our UAE venture in association with a local partner,” Mr Ansal said.

In recent times, all major Indian real estate companies have been on a fund raising spree, mostly by going to the capital markets or through PE fund infusion. In the last one year itself, five prominent real estate companies have hit the capital markets. Just a couple of months back, India’s largest real estate company, DLF, raised over Rs 9,000 crore through an initial public offer (IPO).

After the DLF issue, another Delhi-based real estate firm, Omaxe, raised more than Rs 550 crore through an IPO. Recently, Bangalore-based Puravankara Projects’ IPO raised more than Rs 1,250 crore.

Last year too, there were two significant real estate IPOs in the month of November. While the Delhi-based Parsvnath Developers raised about Rs 1,000 crore, Bangalore-based Sobha Developers got about Rs 500 crore from the capital markets. Interestingly, most of these issues have been significantly over-subscribed.

In this timeframe, there have been many PE deals in the sector as well. Last year, Citigroup had acquired a 5% stake in Ansal API for about Rs 175 crore. George Soros had also bought stakes ranging from 1-2% in various real estate companies, including Unitech, Ansal API and Anant Raj Industries.

Though, not many PE investments have happened at the company level, there have been many such deals at the project level, where the company gets the PE fund in special purpose vehicles (SPVs). Ansal API had recently floated such an SPV in a 51:49 joint venture with IL&FS, reports The Economic Times.


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