Emaar MGF to invest Rs 500cr on Gurgoan housing project

Real estate major Emaar MGF will invest Rs 500 crore to build a mid-income housing project at Gurgaon in Haryana.

The company, which plans to launch its initial public offer to raise up to Rs 3,850 crore, would develop 1,250 units in the 29 acre-project located at Sector-77 in Gurgaon.

Sources said that investment in the project 'Palm Hills' could be around Rs 500 crore, excluding the cost of the land.

With a starting price of Rs 48 lakh the company has sold 650 units in the first phase.

"The encouraging response on the first day of launch is a testimony to the prevailing huge demand for quality housing in the mid-market segment," Emaar MGF Executive Vice Chairman and Managing Director Shravan Gupta said.

Emaar MGF is a joint venture between Dubai-based Emaar Properties and domestic firm MGF. It commenced its operations in India in 2005 and recently got approval from the Sebi for its maiden public offer.

Of the total proceeds from the issue, Emaar MGF plans to utilise Rs 1,972 crore for part re-payment of debt of over Rs 5,800 crore. The company would use Rs 820 crore for redemption of certain redeemable preference shares and will invest Rs 276.8 crore in paying development and licence renewal charges.

Emaar MGF has a land bank of 11,340 acres. It currently has 29 projects, including the Commonwealth Games Village.