Thursday, August 20, 2009

Sahara plans to tap market with $1-bn IPO for realty arm

Lucknow-based Sahara Group is planning to take its realty arm public and raise up to $1 billion, which, if successful, would make the company the second valuable player in the segment after DLF

Sahara Group wants to offload 10% of its stake in the wholly-owned company, valuing itself at $10 billion (Rs 49,000 crore) behind DLF, which has a market cap of Rs 63,000 crore as on August 19, 2009.

Currently, the second valuable firm in the Indian realty firmament is Unitech with a market cap of Rs 17,000 crore. The draft red herring prospectus for the offering will be submitted in a week, the person said.

Refurbishing real estate business!:

According to a real estate expert, the proposed IPO indicates that the group is refurbishing its real estate business after the Reserve Bank of India (RBI) asked it to pull out of its mainstay parabanking activities over a period of time. RBI has asked Sahara India Financial Corporation not to accept any new deposit which matures beyond June 30, 2011.

It has also been asked to stop accepting instalments of existing deposit accounts with effect from that date.

217 townships:

It plans to set up 217 townships, spreading over 100 acres each, in various parts of the country. Of this, the first phase is expected to set up 102 townships, while the remaining in the second phase. The first phase is expected to be over in the next five to seven years while it will kick-off the second phase from 2015.

Trend in the realty industry:

Sahara’s plans aligns with the larger trend in the realty industry, which is crawling out of a market slump. A clutch of real estate companies are in the process of launching IPOs this year in order to cash in on the slow reversal of fortunes in the sector.
To read more, please, visit - The Economic Times

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