3 Ahmedabad based realty firms plan IPO

Published: June 19, 2010 at 10:31 AM | Author: Administrator
News Source: Indian Realty News

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The changing skyline of Gujarat cities is also changing the rules of the game for realtors. With the cities pushing their boundaries and big realty firms eyeing a pie in the development cake, local developers are turning to capital markets to raise resources to ride the next growth wave. While JP Infrastructure Ltd (JPIL), popularly known as Iscon group, will come up with an initial public offering in August this year, two other realty firms, Dharmdev Infrastructure Limited and Safal group too plan to enter the capital market next year, according to a report published in Times of India.

The last time an Ahmedabad-based realty company got listed on the bourses was Radhe Developers in 1995, which has a market capitalisation of Rs 60 crore. The only other listed Ahmedabad realty firm is Ganesh Housing with a market cap of Rs 550 crore. Now, JPIL plans to raise Rs 120 crore to fund its projects. “The funds will be utilised for acquiring land for two residential projects in Ahmedabad and Vadodara. A part of the funds will be diverted for some ongoing projects,” said Pravin Kotak, chairman of JPIL. The company has already filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). JPIL will dilute 25 per cent equity by offering 76,00,000 equity shares of Rs 10 each.

“We plan to come up with an IPO to meet our future expansion plans in next fiscal,” says Umang Thakkar, chairman and managing director of Dharamdev Infrastructure, which is coming up with township and hospital projects. Dhiren Vora of Safal group says his company too would hit capital markets in the near future. Developers say the region, which falls under the Delhi-Mumbai Industrial Corridor influence area, is poised for next level growth and is likely to attract huge investments. Sensing opportunities, national realty players like Godrej Properties, Sahara and Mumbai-based Ajmera group, have forayed into the city.

“Costs have escalated and some of the national players have created competition for the local developers. It is necessary for the local builders to have more liquidity. In the future many more companies are likely to hit the capital market,” says Jaxay Shah, president CREDAI (Gujarat).