Attracting a Rs. 200-crore Private Equity Investment

by : Propertiesmls

Godrej Properties, the real estate arm of the Rs. 7,500-crore Godrej group, is reliably learnt to be in talks with private equity investors, hoping to raise Rs. 200-crore for its Hyderabad and Kolkata realty projects, as it seeks to dilute 49% of its stake in both projects to Private Equity investors. 'Talks are on with several investors for diluting 49% stake in two of our projects in Hyderabad and Kolkata. The final decision is yet to be taken.' confirms Adi Godrej, Chairman - Godrej Properties, even as he declined to comment on the valuation of the two projects. With the combined deal size for both projects in the range of Rs. 180 - 200 crore, they may be set up as a special purpose vehicle, with the majority of the stake being retained by Godrej Properties.

With Godrej Properties in discussion with 7 - 8 investors, discussions are in an advanced stage with two of them including Trikona Capital, a London-based real estate fund. Mr. Godrej, however, declined to name any of the investors participating in the discussion.

Last year, Trikona successfully raised nearly $500-million at the London Stock Exchange's AIM market for investing in the real estate market in India. Focusing heavily on its real estate business, the Godrej group expects it to be a major revenue generator. With 8 - 10% of the group's total revenues, currently accounted for from real estate, it expects this could go up to 20 - 25% over the next five years. With so much confidence reposing in Indian real estate, an IPO is also on the cards for Godrej Properties to fund its expansion.

Off-loading around 10% of its equity during the IPO, the parent firm of Godrej Properties i.e. Godrej Industries, owns 83% of its equity and 17% is with the Godrej family that also owns 86% of Godrej Industries.

In operation for the past 17-years, Godrej Properties is active in Kolkata, having tied up with two IT parks and one retail mall, while it is setting up an IT Park in Hyderabad. Godrej Properties with commercial, retail and residential projects is present in five cities across the country, including Mumbai, Pune, Hyderabad, Bangalore and Kolkata.

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