Tobacco major GTC Industries Limited (GTCIL) is mulling de-merging the company and forming a separate outfit to manage its forays into the country's burgeoning real-estate industry.
The Rs 1,300-crore company is planning to develop properties in cities like Hyderabad, Mumbai and Baroda by entering into joint ventures with local developers, but has no plans to sell its land holdings.
Sanjay Dalmia, the promoter of GTC, said: “We have prime real estate in many important Indian cities and with the country witnessing a major real estate boom, it is only pertinent that we unlock our land holdings. Developing them will give us an opportunity to generate a lot of value addition for our shareholders. We are examining a plan to de-merge the company so that we can have separate concerns managing different business models.”
GTC has tied-up with a local developer in Hyderabad to develop a commercial-cum-retail project on a 2.75 acre plot in Kukatpally in the city at an estimated Rs 200 crore, of which GTC’s would hold 50 per cent stake.
While the company has 42 acres of land near the airport in Baroda, in Mumbai it has 7.5 acres in Vile Parle and 4.5 acres in Marol. Its other properties are in Raigadh as well as at many places across Andhra Pradesh. Group subsidiaries also have properties in Chennai and Dwarka in Delhi.
The Vile Parle and Marol properties in Mumbai alone are valued at Rs 2,000 crores. The repeal of the Urban Land Ceiling Regulation Act (ULCRA) in Mumbai recently has further propelled the value of these properties. “The format of the developments – whether residential, commercial or retail – will be finalized seeing the catchment area as well as which gives the best return,” says Dalmia.
Putting to rest rumours that there were plans to hive off the company's tobacco business, Dalmia said, “Contrary to speculation, we are bullish about the tobacco business and even planning to introduce cigarettes with 50 per cent lower toxicity soon.”