JP Morgan, the global financial powerhouse, is understood to be eyeing a entry in the one of the largest real estate transactions in India which is shaping up in Bangalore. Global private equity giant Blackstone along with Bangalore-based Embassy Developers are working on sewing up a Rs 1,950 crore deal to buy out 106 acre SEZ development under Vrindavan Tech Village.
It is understood that JP Morgan is understood to be looking at picking up a stake in this project if an investor in the consortium is opting out or paring stake. HDFC Property is the other fund which is working with Blackstone and Embassy in this transaction. JP Morgan has been in discussions with Embassy to invest upto $500 million in a range of residential projects, the discussions for which have been moving slowly. It is understood that even as talks for the residential projects may be delayed further, Embassy and JP Morgan are exploring how the talks can be structured for investment in the SEZ transaction.
Vrindavan Tech Village is promoted by Mithilesh Kumar Tripathi, Chairman of Vikas Telecom Ltd, and is developed by Assetz Homes. It is understood that around 22 acres has been developed with 2 million square feet of space built for technology companies. Embassy is expected to develop the rest for IT firms and also for residential purposes.
Senior investment banking sources indicated that few members of the promoters family are in various stages of pooling in their stakes for the sale and this process is one of the reasons for the delay in the deal being finalised in addition to settling some debt in the company. It is understood that Embassy has managed to pay out the debt to a large extent, approximately Rs 600 crore out of the total Rs 900 crore, through bridge financing. None of the stakeholders involved could be reached for comments.
It is understood that this transaction, which is being discussed for the past nearly an year is expected to finally sewn up by October 2013. Private equity deals during the first half of 2013 saw a drop of 46%, according to real estate advisory firm Cushman & Wakefield. However, C&W added that PE funds are looking to invest as much as $2 billion as there are many deals which is in the discussion stages.