Crompton Greaves puts land parcel up for sale

Will sell 32 acres in tranches, total valuation Rs 1,400 crore

Crompton Greaves has put up a part of its land parcel at LBS Marg in the eastern suburbs of this city for sale. Property consultants say the deal is likely to be announced in 7-10 days.

“The company has put 8-10 acres up for sale now; the rest will be sold in tranches,” said a property consultant. The total valuation of the 32-34-acre plot is estimated at Rs 1,400 crore.

In an emailed response to a query, the company said: “The company, in ordinary course, monitors its business activities by duly conducting a generic assessment of its asset utilisation and potential for optimisation. As a company policy, we do not respond to market rumours and speculation.”

Sources said most leading builders were in the race to buy the land parcel, adding Lodha, Runwal and Oberoi Realty were the frontrunners.

“This property in LBS Marg, Kanjurmarg, has an excellent view. While there is a factory on the adjacent area now, it is expected the factory will be shifted gradually; the rest of the land will also be sold,” said a property consultant.

Analysts said at an analyst meeting, the Crompton Greaves management had mentioned the company, from a long-term perspective, planned to move its power transformer factory from Mumbai to Gujarat.

Property consultants say at Rs 35 crore an acre, the valuations on offer are at par with those of previous deals in the same area. “The valuation seems quite fair. A couple of years ago, Indian Smelting had sold a land parcel there, at about Rs 30 crore an acre,” said a property consultant.

For the March quarter, Crompton Greaves’ profit rose 2.5 times to Rs 63.82 crore from Rs 25.27 crore in the corresponding period last year, owing to an improvement in the power systems business and a rise in other income. The power systems business reported 17.3 per cent growth in revenue and a profit of Rs 112 crore, against a loss of Rs 58 crore in the march quarter of FY13. During the same period, the company’s other income jumped from Rs 5 crore to Rs 84 crore.

However, the company’s international operations continue to lose money. While the power business contributes 60 per cent to the company’s revenue, the consumer products segment accounts for 20 per cent and industrial systems 15 per cent. The Crompton Greaves management is expects a break-even at the operating level this quarter.

On Tuesday, the Crompton Greaves stock closed at Rs 198.15 on BSE, down 2.53 per cent.
HOT PROPERTY

• Property consultants say the deal is likely to be announced in 7-10 days
• Sources say most leading builders are in the race to buy the land parcel. Lodha, Runwal and Oberoi Realty are frontrunners