Realty co Eldeco eyes 250 mn PE investment
BANGALORE: Delhi-based tier II realty
player Eldeco Group is in discussions with AIG and Merrill Lynch for raising
$200-250 million from a clutch of private equity (PE) investors. As part of the
plan, Eldeco has already raised some funds from Xander PE.
Sources
said group company Eldeco Infrastructure %26amp; Properties (EIPL) was in the
market for raising funds at the entity and special purpose vehicle (SPV) level
for upcoming projects in Ludhiana and Jalandhar, in Punjab, and in two cities in
Maharashtra.
The company is also looking at raising funds through
four SPVs and may be at the holding entity level as well. “We look at
raising funds from time to time, but there is no need for us to comment on
it,†said Eldeco CFO NK Ahuja. The company denied it was holding talks
with the PE firms, and that it has raised funds from Xander.
The
move comes after the group’s earlier plans to merge the listed entity
Eldeco Housing %26amp; Industries (EHIL) with EIPL and raise funds from the
capital market was abandoned, sources said. Lucknow-based EHIL is a smaller
group company compared to the privately-held EIPL, which has notched up 80%
annualised growth since being incorporated in 2000.
EIPL claims that
it has developments worth over Rs 3,500 crore across segments. The development
comes even as some analysts predicted that PE cash flow into the realty sector
in some key markets could be tightening on account of oversupply concerns as
well as a slowdown in offtake.
This includes markets like NCR,
Bangalore, Chennai and Hyderabad where there is a growing concern, especially on
the commercial space offtake, industry observers said. However, there’s a
contrary view that more PE funds are being committed to Asian markets, with the
outlay for the first time bigger than what is in the pipeline for Europe in
2008.
This could see fund action remaining robust in markets like
India. Further, developers, which are seeking funds for developments in smaller
cities, could be relatively better placed as tier II markets are expected to
open up in a significant way for the realty boom.
Tags: amp, developers0
