Monday, January 29, 2007

Indiabulls raises Rs 1,200 cr

from Economic times
MUMBAI: Dev Property Development, an overseas arm of Indiabulls Real Estate, raised Rs 1,200 crore through an offer of its shares to qualified institutional investors at the London Stock Exchange on the alternative investment market (AIM) segment.

The company's shares will start trading on the exchange from Monday. Sources said LN Mittal, Fidelity, Capital Research and the government of Singapore have picked up large stakes in the IPO.

Dev Property Development will acquire minority stake in the projects of Indiabulls through a secondary sale of shares by the latter and by investing fresh equity capital in Indiabulls' projects for a total consideration of Rs 1,055 crore.

A fortnight ago, Morgan Stanley had invested big amount in city-based real estate company Oberoi Construction. The rush for Indian real estate projects is a reflection of the higher returns from properties vis-a-vis the stock market.

The stock market offers a return of 20%, while returns from real estate projects are as high as 25%. With higher disposable incomes, Indians are buying homes, splurging on entertainment and buying from retail chains.

Hence, there is a rush to build homes, entertainment and retail malls. Indiabulls had received Rs 437 crore by partial sale of its stake in Jupiter Mills and Elphinstone Mills development projects.

Dev Property has also invested Rs 618 crore in subsidiary companies of Indiabulls undertaking real estate projects. It would also have the right to co-invest along with Indiabulls in its future real estate projects.

Earlier, Knight Frank had valued Indiabulls' real estate projects at Rs 21,569 crore and Indiabulls' stake in its projects at Rs 15,125 crore.

Indiabulls' real estate business has been demerged to Indiabulls Real Estate and its shares are expected to start trading in February.

All shareholders of Indiabulls Financial Services received one share of Indiabulls Real Estate for every share they held in Indiabulls Financial Services.

In December, Indiabulls Infrastructure, a subsidiary of Indiabulls Real Estate, had sold 13.3% stake to LN Mittal and Farallon for a consideration of Rs 447 crore.

The Dev Property IPO was managed by Deutsche Bank, Citigroup and UBS. The lead marketing agent of the issue was CLSA and KPMG is the statutory auditor of Dev Property Development.

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