HCC up 12% on Sebi clearance for Lavasa IPO

The plan is to raise Rs 750 cr according to the draft documents

Hindustan Construction Company (HCC) climbed 12.1 per cent at its intra-day high on Tuesday, touching Rs 38.25 a share on news of regulatory clearances for the public issue of Lavasa Corporation, where it has a majority stake.

The stock subsequently corrected but still closed at Rs 36.75, with a gain of 7.8 per cent, BSE data showed.

The Securities and Exchange Board of India cleared the documents for Lavasa’s maiden public issue on Friday, according to its website. The bankers to the issue are Axis Capital, ICICI Securities and Kotak Investment Banking. The company had filed draft documents with the regulator in July.

The plan is to raise Rs 750 crore, according to the draft documents. This is lower than the Rs 2,000 crore it had planned to raise in 2010 through an IPO; the plan was later dropped. It had then planned to raise Rs 2,000 crore through sale of a 10 per cent stake. The current plan is to raise Rs 750 crore through sale of a 15 per cent stake.

Ajit Gulabchand’s HCC's realty arm has 68.7 per cent stake in Lavasa. The next biggest stakeholder is Gautam Thapar’s Avantha Group (17.18 per cent). Other investors are Venkateshwara Hatcheries (7.81 per cent) and Pune-based investor Vinay Maniar (6.29 per cent).

The government had alleged environmental violations and issued a showcause notice in 2010. It passed an order in 2011. The company appealed against it in the high court here. A separate public interest suit was filed against the company on alleged violations of Section 9 and 10 of the Maharashtra Agricultural (Ceiling on Holdings) Act, 1961. The suit alleged the company had bought a little over 10,000 acres in violation of regulations.