Radhe Developers plans Rs 75 crore IPO

Ahmedabad-based Radhe Developers (India) Ltd, plans to come out with an initial public offering (IPO) of Rs 75 crore in the next two months to fund its Rs 400 crore mega town ship project in Vadodara.

The company is in talks with Shahra Housing to form joint venture for its town ship project. After the issue, the foreign institutional holding in the company will go up to 14 per cent from the current level of 1 per cent.

"We are already having over 11,000 acres of land in Vadodara and planning to come out with a mega township 'Ajwa Acres'. The first phase of the project would cost around Rs 150 crore of which we plan to raise Rs 75 crore through our IPO, while the balance would be funded by internal accruals and institutional investors. We are at present negotiating for the book building process" Ashish Patel, managing director, Radhe Developers (India) Ltd told Business Standard on Tuesday.

IDBI Bank and Kotak Securities are likely to be the merchant bankers and Enam Financial Consulatnts Pvt Ltd may act as the first lead managers of the issue.

However, the company has finalised the Ahmedabad-based Chartered Capital as the second lead manager for the issue.

The company has recently bagged an order of Rs 50 crore from Salt Trading Corporation Ltd, Nepal's semi government corporation in which they propose to built a shopping mall and multiplex in Kathmandu.

"With the infrastructure boom and the prestigeous projects in our hands, the company's growth would be very good in the near future and it will gain investors confidence. We are also in initial phase of talks with US and UK based institutional investors, though nothing have been finalised yet. However, Nepal based STCL had shown keen interest in buying around 10 per cent of company's equity," said Patel.

The company has reported a profit of around Rs 30 lakh as on Mrach 31, 2004, while the company plans to close the last financial year with a profit exceeding Rs three crore.