Lakshmi Mittal to buy 3.9% in Indiabulls' Singapore trust

Billionaire Lakshmi Mittal, the world's richest Indian, has committed to buy units equivalent to a 3.9 per cent stake in Indiabulls Properties Investment Trust, which is in process of listing in Singapore.

Mittal will purchase 91 million common units of IPIT at the offering price that will be determined through a book building process, but would "not be obliged to subscribe and pay" for any of the units if the subscription cost exceeds 100.1 million Singapore dollars (about 73 million US dollars).

Indiabulls Real Estate, part of diversified Indiabulls group with interests in financial services, power, retail and realty businesses, last week filed a prospectus with Monetary Authority of Singapore for an initial public offer of IPIT, estimated to raise about USD 300 million.

Read more in

The Economic Times article.

Parsvnath sells 30% stake in Mumbai project

Parsvnath Developers, a real estate major, today announced that it has sold 30% stake in a Mumbai project to foreign funds for a total consideration of Rs 186 crore for the development of the BEST bus depot near the Bandra-Kurla Complex, in Mumbai.
According to a release issued by the company to the BSE today, the total cost of the two projects has been valued at Rs 620 crore.

The company has proposed to sell 15% stake each in the Kurla bus depot redevelopment project to Euronext-listed Yatra Capital and recently-launched Saffron India Real Estate Fund-I. Both are promoted by UK-based fund manager Saffron Asset Advisors.

Yatra and Saffron have picked up the stake at land-value basis. They will also proportionately fund all future development and construction activities for the project, Parsvnath said.

Unitech holds $1.5bn QIP issue

Real estate major Unitech Ltd has put on hold a $1.5 billion qualified institutional placement (QIP) issue planned for the first quarter of 2008 in the light of the instability in the domestic stock markets and the global liquidity crunch.The company could place a maximum of 200 million shares in the QIP and dilute up to 12 per cent of shares on a total paid-up share capital of 1,623.37 million shares.

Unitech’s decision follows the cancellation of initial public offers (IPOs) by Emaar MGF, another major property developer, and Wockhardt Hospitals, due to weak response from investors.

Unitech was expected to use the QIP proceeds for its upcoming projects and telecom foray, which it is planning in all 22 telecom circles of the country, for which it has received a licence from the government. According to its annual report for 2006-07, it has 50 million square feet of projects under construction.

The company is also foraying into the Mumbai real estate market with an investment of Rs 4,000 crore and is planning to build 50 malls across the country with an investment of Rs 20,000 crore.

Unitech has collected over Rs 3,100 crore on the Alternative Investment Market (AIM) of the London Stock Exchange through its arm Unitech Corporate Parks Plc (UCP).It has also received approval from the Singapore Stock Exchange for an IPO for Unitech Office Trust, which will acquire its IT/ITeS firms in Noida, Gurgaon and Kolkata. It is expected to raise $700 million (Rs 2,800 crore) through this IPO.

Red Fort launches $250 million domestic fund

Red Fort Capital, an international private equity firm, has launched its first domestic fund of $250 million (Rs 1000 crore) targeting deals in the real estate space. The fund will focus on land and realty projects worth over Rs 5000 crore in the next one year.

The investment will be made in under-valued land for residential, commercial, IT, retail and hospitality projects, focusing on redevelopment projects in Mumbai and affordable housing and land in key urban centres.

Last year, the company had committed investments to a number of land and real estate projects worth over Rs 7,500 crore, partnering with the Bangalore-based Prestige Group and Indu Projects in Hyderabad.

Read more in The Business Standard article.

DLF offloads 49% in 8 housing projects

DLF, the country’s largest real estate developer by market value, today said that it has sold 49 per cent stake in eight residential projects to private equity players for Rs 1,675 crore.

The development takes place five months after the company raised over Rs 9,000 crore from its initial public offering.

The realty firm has sold the stake in seven residential projects to a Merrill Lynch entity for Rs 1,480 crore, making this as one of the largest foreign direct investments in the Indian real estate sector.

These housing developments, classified as mid-income by the company at a price point of Rs 55 lakh an apartment, are located at Chennai, Bangalore, Kochi and Indore. All these projects are expected to be developed in about seven to eight years.

DLF has also sold 49 per cent stake for Rs 194 crore to Brahma Investments in another residential project at Panchkula, Haryana.

Read more in The Business standard article.

Lodha Developers plan Rs 8,000cr IPO

Lodha Developers, a Mumbai-based realty firm, plans to raise between Rs 6,000-Rs 8,000 crore through a public issue within the next 12-months and off-load 10-15% stake in the process.The realty major, which has an ambitious and massive expansion plan of around Rs 10,000 crore, will use the proceeds of the IPO to fuel this expansion.

The IPO plans are expected to be fine-tuned over the next 3-4 months. "The promoters are expected to off-load around 10-15% of their stake," a source said.

The Mangal Prabhat Lodha-spearheaded group plans to use the IPO proceeds to fund expansion, which include residential and commercial projects in Tier I and II cities. This includes up-market residential projects of around Rs 2,000 crore at Walkeshwar and Prabhadevi in the metropolis.

Lodha group had recently acquired a 12.9-acre plot in Eden Square, Hyderabad, for Rs 255.42 crore, to develop a high-end commercial complex in about three million square feet area.

DLF Assets to raise $1 bn from overseas listing

Billionaire real estate tycoon K P Singh, whose flagship firm DLF recently went public with India's largest IPO, is looking to list his another closely held group company DLF Assets with a one billion dollar issue.DLF Assets is expected to file for REIT (real estate investment trust) IPO in Singapore next month, the company sources said.

DLF Assets, which has been set up for holding completed commercial assets, is owned by DLF Ltd's promoters. It is independent of DLF Ltd. DAPL was set up for bidding along with other companies in potential assets sales by DLF Ltd.

DLF Assets Pvt Ltd (DAPL) had earlier received an investment of 400 million dollars and 200 million dollars from global investing firm D E Shaw and a fund sponsored by investment banking firm Lehman Brothers respectively.

Read more in The Economic Times article.

Shapoorji Pallonji realty targets $300m from PEs

HDFC Realty, Citigroup and Government of Singapore Investment Corporation (GIC), among others, are set to pump $300 million into Shapoorji Pallonji Group’s realty business.

Sources said the deal—amongst the biggest private-equity plays in the Indian real estate sector—was imminent and might also involve a few more investors. It is believed that PEs could pick 15-20% stake in the recently-created holding entity of the group’s realty venture.

The Mumbai-based 140-year-old construction group is developing real estate worth about $2 billion across India. The group’s realty arm is managed by Shapoor Mistry, the elder son of Pallonji Mistry, among the wealthiest Indians.

These projects are mostly FDI-compliant and located at prime areas, which will attract substantial premium. It is also working on over 10 real estate projects in Mumbai, Pune, Hyderabad, Chennai, Kolkata, Delhi, Nagpur and Mysore.

Curbs likely on VC funds for realty

The government is reviewing norms for investments by foreign venture capital funds in real estate, after the Reserve Bank of India coming round to the view that such funding is helping create an asset bubble in the sector.

There is a view in the government that such funding in the sector should be stopped completely, sources close to the development said.

Venture capital funds do not invest directly in real estate projects. Instead, they put their money in private equity firms, which, in turn, invest in the sector. A total of 35 private equity funds are reported to have invested in the Indian real estate sector and another 10 are said to be poised to do so. Many of them have kitties swollen with money from VCs.

The government had recently clamped down on the use of external commercial borrowing by real estate companies in order to check capital inflow, which, it feels, is fuelling inflation in the country.

With stock market sentiments too turning against the sector, real estate developers were looking at private equity funds as their last hope. But that source too could suffer if the proposed clampdown on venture capital funds takes place.

Read more in The Business Standard article.

DLF plans Rs1,000cr spend in life insurance JV

Real estate giant DLF today announced its tie-up with US-based financial player Prudential Financial, Inc (PFI) for a foray in life insurance business and said the two partners will invest about Rs 1,000 crore over the next ten years in the venture.The company is applying for a licence from the Insurance Regulatory and Development Authority (IRDA), and hopes to start operations by early 2008.

A DLF spokesperson said both the partners would have representatives on the board, while Prudential would take care of the operations.

Read more in The Business-Standard article.