Sobha, REL team up for AP project

Bangalore-based Sobha Developers has signed a pact with Reliance Energy to build a business district and trade towers in Hyderabad.

The company is part of the consortium with Reliance Energy to execute the Andhra Pradesh Industrial Infrastructure Corporation's initiative to create townships and work places on 97 acres in Hyderabad.

For this, Sobha Developers and Reliance Energy have agreed to form a special purpose vehicle (SPV) to execute the project.

Sobha Developers has expressed its willingness to invest up to 26 per cent of the share capital of the SPV, which is yet to be decided, the company said in its draft red herring prospectus before the Securities and Exchange Board of India.

A company spokesperson said they have no further comments on the pact. "We are still in the negotiation stage and cannot comment anything other than what has been published in the DHRP," he added.

The company said that as part of its first contractual projects, built the corporate block for Infosys Technologies Limited in Bangalore.

The project was completed in September 2000. As of June 30, 2006, the company has constructed 66 contractual projects in eight states, covering approximately 7.29 million square feet of super built-up area and two commercial projects in Bangalore aggregating to 0.11 million square feet of super built-up area.

As part of the diversification, the Bangalore-based builder is also eyeing projects such as hotels, integrated townships, malls, multiplexes and shopping complexes.

"Our strategy is to position ourselves to capitalise on the development and construction opportunities generated by the various sectors of the Indian economy. Hence we have executed an MoU with Reliance Energy Limited in May 2006," said the company.

As part of the geographical expansion, Sobha Developers, which has residential development activities focused on Bangalore, is now looking at diversifying and expanding the real estate development and construction business into Mysore, Pune, Kochi, Delhi, Chennai and Mumbai.