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Godrej Properties to raise Rs 600 cr

Godrej Properties Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India.

india Updated: May 30, 2008 21:10 IST

Godrej Properties Ltd, the real estate arm of the diversified Godrej group, on Friday filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI). The company wants to raise Rs 600 crore through an initial public offering (IPO).

Godrej properties proposes to issue 9,429,750 equity shares of Rs 10 each through 100 per cent book building process to fund its forthcoming projects. The equity dilution by promoters amount to 13.5 per cent of the post issue paid up capital of the company.

Godrej Industries and the Godrej family led by Adi Godrej hold majority stake in the company. The parent company Godrej Industries Ltd, currently holds 81.41 per cent of the equity share capital of Godrej Properties. Godrej Industries Limited is the listed flagship company of the Godrej Group.

The IPO is expected to be completed by September 2008. The company has been preparing to get listed since October last year but poor market conditions forced it to defer the launch of the IPO. In January this year Emaar MGF had to withdraw their Rs 6,000 crore IPO due to a market melt down. This could be the first real estate IPO since then.

Godrej Properties Ltd is in the business of real estate development including residential, commercial and township development. The company currently has real estate development projects in 11 cities in the country at various stages of development. As of May 15, 2008, it has completed a total of 19 projects consisting 13 residential and six commercial projects, aggregating to approximately 3.62 million square feet of area that can be developed.

Anuj Puri, Chairman and Country head Jones Lang Lasalle Meghraj, JLLM, a global real estate consultancy said that the market would certainly welcome good quality stocks like Godrej Properties. "Despite the depressed sentiments, the market has appetite to accommodate good quality stocks. The market needs such (Godrej properties) developers to get listed. All their developments are of superior quality and the entry of corporates such as Godrej will bring transparency in the real estate sector, because these people know how to effectively run businesses."

Godrej Properties’ land reserves currently stands at 404 acres aggregating to approximately 78.87 million square feet of area that can be developed. The proceeds of the IPO will be utilized for acquisition of land, completion of on going projects and repaying debt.

For the financial year ending March 2008, the company made a profit after tax of Rs 75.9 crore on an income of Rs 227.5 crore. The total net worth of the company stands at Rs 242.1 crore. The net asset value per share as on March 31, 08 stood at Rs 41.24. ICICI Securities and Kotak Mahindra Capital are the book-running lead managers to the issue.