RIL's Mukesh Ambani in talks to buy out Jai Corp's 24% stake in NMSEZ

If deal materialises, Ambani will be the largest shareholder in venture with 48.1% stake

Reliance Industries Chairman Mukesh Ambani, through his personal investment firms, is in talks to buy out BSE-listed Jai Corp’s 24 per cent stake in Navi Mumbai Special Economic Zone (NMSEZ). If the deal goes through, Ambani will be the largest shareholder of the NMSEZ with a 48.1 per cent stake.
 

Last week, the NMSEZ project received the go-ahead from the Maharashtra government-owned City and Industrial Development Corporation (Cidco) for its conversion into an industrial city. 

Dronagiri Infrastructure, a company jointly promoted by Ambani, Jai Corp, and SKIL Infrastructure, owns a 74 per cent stake in the NMSEZ, while Cidco owns the rest. Based on Dronagiri’s shareholding, Ambani and Jai Corp have an effective shareholding of 24.05 per cent each, and SKIL owns 25.9 per cent.
 

The project has been stalled for the past 14 years and would require a clearance from the Maharashtra Cabinet for the change of end-use of land.
 

According to Cidco, the project already has around 2,140 hectares of land in Navi Mumbai. Of this, 1,390 hectares of land is in Dronagiri, 400 hectares in Ulwe, and 350 hectares in Kalamboli.

Talks are currently centred around the valuation of the project. The average price of land sold by Cidco to other developers is Rs 60,000-Rs 120,000 per sq metre in Ulwe, Rs 30,000-Rs 60,000 per sq metre in Dronagiri, and Rs 50,000-Rs 100,000 per sq metre in Kalamboli.
 

The project will be implemented after a delay of nearly a decade and a half as successive governments debated over the SEZ norms and lack of land contiguity in the NMSEZ. With the government clearing the conversion of SEZ into an industrial city, the project will cater to local industries.

According to a source close to the development, Reliance Industries, with its good project implementation skills, is likely to take over the construction of the industrial city. The proposed industrial city will have 80 per cent land reserved for industries and the rest for residential units.
 

E-mails sent to Mukesh Ambani and Jai Corp did not elicit any response.

Once the Sewri-Nhava Sheva Trans Harbour Link is constructed by L&T and the Tatas, the NMSEZ project will get direct connectivity to central and south Mumbai, thus bringing down the travel time to just 30 minutes, Cidco officials said.

The new airport to be built in Navi Mumbai by GVK will connect the NMSEZ with the rest of the world, while the Jawaharlal Nehru Port Trust would be used for export-related activities.

A decade ago, Ambani wanted to set up a similar but far bigger city on the outskirts of Mumbai. But the Maha Mumbai SEZ project was abandoned following massive protests by locals over land acquisition. After the successful launch of his wireless telephony services, Jio, with a Rs 2-trillion investment, the industrial city will be the next big project for Ambani.

The Jai Corp stock was trading at Rs 203 a share on Wednesday. Jai Corp is promoted by Anand Jain, a close confidant of Ambani.

Mega deal on the cards
 

* Mukesh Ambani wants to consolidate stake in NMSEZ
 

* Ambani to emerge as largest shareholder 
 

* SEZ’s land use changed to industrial 
 

* Cabinet clearance needed for project take-off
 

* Reliance likely to construct & market the project
 

* After the suucessful launch of Jio, with a Rs 2 trillion investment, the industrial city will be the next big project for Ambani