HDIL in talks with PE funds for pre-IPO stake sale

Mumbai-based real estate developer Housing Development and Infrastructure Limited (HDIL) is in talks with private equity and real estate funds such as ICICI Ventures, Kotak Realty and HDFC Realty for selling a 4% stake for about Rs. 550 crores. It is quite possible that these three firms together can subscribe to the pre-IPO portion.

HDIL is in the process of diluting 4% stake in the company as part of its pre-IPO placement. It plans to do an IPO to raise over Rs. 2000 crores some time soon. HDIL has developed approximately 72.8 mn square feet of saleable area and 5.5 mn square feet of rehabilitation housing area so far. The company is in the process of expanding its property development activities to other parts of India.

Article in The Economic Times.

Oberoi Constructions receives Rs. 675 crores from Morgan Stanley Real Estate Fund

Morgan Stanley Real Estate Fund has invested Rs. 675 crores (approximately $152 mn) in Mumbai-based Oberoi Constructions for an undisclosed stake. The private equity deal is said to be the largest in the Indian real estate sector. Fourteen other funds, including Blackstone, Carlyle, and GE, were in the race to acquire the stake in Oberoi Constructions. Morgan Stanley Real Estate Fund recently invested $67.4 mn in Mantri Developers. The fund looks at a return of more than 30% annually.

The company has projects lined up for Pune, Hyderabad and Bangalore for which it will acquire land. It has interests in both commercial and residential projects. It plans to diversify into shopping malls, hotels, hospitals and education centres. It has ongoing residential and commercial projects in Mumbai’s suburbs – the Oberoi Mall in Goregaon, Oberoi Chambers and Garden Estate in Andheri, among others.

The real estate company has been valued at $1 bn by Kotak Mahindra Capital, the advisors to the deal. Anand Madduri, Executive Director, Morgan Stanley Dean Witter Asia, will be joining the Oberoi Constructions’ board.

The real estate sector is growing at a whopping 35-40% and has seen large private equity deals in the last few months with nearly $350 mn in investments flowing into the sector. Siachen Capital has invested $100 mn in Bangalore-based Nitesh Estates, HDFC Real Estate has invested $35 mn in the Ansals IT City and Parks and another $31 mn in Pune-based developer Vascon Engineers. More than 20 funds are interested in the sector.

Read The Economic Times article for more details.