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Hindustan Construction to Raise $431 Million in Lavasa Initial Share Sale
Lavasa Corp., a unit of Indian developer Hindustan Construction Ltd., plans to raise as much as 20 billion rupees ($431 million) by selling shares.
Lavasa, which has built a namesake township near Mumbai, will sell a 10 percent stake in an initial public offer and will file sale documents with the regulator “very soon,” Ajit Gulabchand, chairman of Hindustan Construction, said today.
“The present economic environment is appropriate to unlock value in Lavasa,” Gulabchand told reporters in Mumbai. “Demand for equity assets is strong, since a lot of potential in India is yet to be realized.”
Lavasa proposes to sell shares following real estate companies such as Embassy Property Developers Ltd., which plans to raise 24 billion rupees in an IPO, according to a share sale document filed this month. Lodha Developers Ltd., Sahara Prime City Ltd. are also planning to raise money, according to data compiled by Bloomberg.
Hindustan Construction shares rose 4 percent to 133.85 rupees at the 3:30 p.m. close in Mumbai. The stock has declined 8.4 percent this year.
Only one of the three developers that sold shares this year is trading above its initial share sale offer price as investors shun property stocks. The Bombay Stock Exchange’s Realty Index has dropped 12 percent compared with a 2.3 percent increase in the benchmark Sensex Index.
Profit at Lavasa rose 87 percent to 490 million rupees in the quarter ended June 30. Sales climbed 94 percent to 1.81 billion rupees, Hindustan Construction said in a statement to the Bombay stock exchange today.
The township of Lavasa, spread over 25,000 acres (10,117 hectares), claims to be India’s first planned hill city set amidst seven hills and 60 kilometers (37.3 miles) of lakefront.
The company has started work on its second township, the statement said.
To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net
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