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Shriram Properties, the real estate arm of the Rs 60,000 crore Shriram Group, is planning to raise around Rs 1,000-1,500 crore equity. The company is in talks with four PE funds, including the existing investors, and portion of the money will be raised from four investors by end of next month.
M Murali, managing director, Shriram Properties said "we got a land bank of around 1,300 acres, discussion started to build around 45 million sq.ft. For 20 million sq.ft discussion are in various stages. We would require around Rs 1,000-1500 crore equity and discussions have started with various funds we hope to rope in four investors by end of next month."
In 2013-14, the company sold 28 lakh sq.ft and in 2014-15 targets 36 lakh sq.ft sale, 80% of it would be in mid-segment.
Shriram Properties attracted around $300 million from around seven PE funds till now. The investors include 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 as far as returns, the company demonstrated it can be a good investment opportunity. ICICI Prudential exited with 27% IRR.
Another 12 million sq.ft, including half a million in commercial space, are under construction, at a cost of around Rs 2,600 crore. Murali claimed that only 20% of the space is in stock, while the balance is sold. The company will start delivering from the next six months to three years.
He added, currently there are 15-20 mid size PE funds which are ready to invest around Rs 50-100 crore in a deal, 40 funds are ready to invest upto Rs 200 crore and there are six funds in the market, which are looking only investment above Rs 200 crore.
The company reported a turnover of around Rs 500 crore in 2013-14 as compared to Rs 378 crore in 2012-13 and set a target of Rs 750 crore in 2014-15. EBITDA during the fiscal was around 15-18%.
