Shriram Properties to raise up to Rs 1,500-cr equity

The company has attracted $300 million (Rs 1,800 crore) from seven PE funds till now

Shriram Properties, real estate arm of the Rs 60,000-crore Shriram Group, plans to raise Rs 1,000-1,500 crore of equity. The company is in talks with various private equity (PE) funds, including existing investors.

M Murali, managing director, said: “We’ve got a land bank of around 1,300 acres. Discussion has started to build around 45 million sq.ft. Discussion is in various stages for 20 mn sq ft. We would require Rs 1,000-1500 crore equity and discussions have started with various funds. We hope to rope in four investors by the end of next month.”

In 2013-14, the company sold 2.8 mn sq ft. In 2014-15, it targets 3.6 mn sq ft, about 80 per cent in the mid-segment.

Shriram Properties has attracted around $300 mn (Rs 1,800 crore) from seven PE funds till now. These were Walton Street Capital, TPG, Star Wood Capital, Sun Apollo, ICICI Prudential and ASK Property Investment Advisors.

Asked whether the funds are ready to invest, given the market sentiment and poor returns, Murali said the company had demonstrated it was a good investment opportunity. ICICI Prudential exited with a 27 per cent internal rate of return.

Another 12 million sq.ft, including 500,000 sq ft in commercial space, are under construction, at a cost of Rs 2,600 crore. Murali said only 20 per cent of the space was in stock, the rest having been sold. The company will start delivering from the next six months to three years. He said there were 15-20 midsize PE funds ready to invest Rs 50-100 crore in a deal, 40 funds were ready to invest up to Rs 200 crore and six were only looking for investment above Rs 200 crore.

The company reported a turnover of Rs 500 crore in 2013-14, compared to Rs 378 crore in 2012-13. The target is Rs 750 crore for 2014-15.