We should have an IPO in the next 2-3 months

We should have an IPO in the next 2-3 months
Comment E-mail Print Share
First Published: Mon, Aug 31 2009. 10 33 PM IST

Possibilities galore: Adi Godrej says the firm is looking at acquisitions in household and personal care sectors. Abhijit Bhatlekar / Mint
Possibilities galore: Adi Godrej says the firm is looking at acquisitions in household and personal care sectors. Abhijit Bhatlekar / Mint
Updated: Mon, Aug 31 2009. 10 33 PM IST
New Delhi: The Godrej Group has mapped out expansion plans that include making acquisitions and raising funds for the real estate business. Mint spoke to group chairman Adi Godrej on the plans. Edited excerpts:
There has been talk about Godrej planning to buy US consumer goods company Sara Lee Corp.’s stake in Godrej Sara Lee Pvt Ltd. Can you comment?
Possibilities galore: Adi Godrej says the firm is looking at acquisitions in household and personal care sectors. Abhijit Bhatlekar / Mint
Sara Lee had announced that they want to sell their household and bodycare business, which has brands such as Good Knight, Hit, and Kiwi. If that happens, we have to watch how it pans out. There could be an opportunity , but it’s difficult to say now. We will take a look at all the possibilities. Godrej Sara lee was a 51:49 joint venture between the Sara Lee Corp (51%) and...Godrej & Boyce Manufacturing Co. and Godrej Industries Ltd (which held the remainder). In order to attain greater synergy in the fast moving consumer goods business, we decided that the 49% will be bought over by Godrej Consumer Pvt. Ltd (GCPL). The court order for the transfer of shares is expected in September. Buying out the remaining stock is not up to us.
Are you looking at making acquisitions? If yes, what is likely to be the size and in which areas?
We are looking at several potential acquisitions in India and other developing nations in the areas of household and personal care (products). Since GCPL has a very healthy balance sheet and can raise more cash, Rs1,000 crore or larger acquisition is possible.
You had plans to come out with an initial public offering for your realty business. What is the progress on that?
It is in quite an advanced stage. The red herring prospectus has been passed by the Sebi (Securities and Exchange Board of India). Our investment bankers are working on it and hopefully if the market continues to be favourable, in the next two-three months we should have an IPO.We are not selling any promoters’ share, but raising fresh cash. The proceeds will be used for the company’s expansion. I thinks in the next five years there will be huge demand in affordable housing in the range of Rs5-25 lakh. We will be announcing 2-3 major projects in (the) near future. We have project going across India, including Bangalore, Mumbai, Pune, Hyderabad, Cochin, Kolkata and Ahmedabad. About 90% of our projects would be in the affordable housing range.
Are the prices of Godrej products likely to go up in the near future?
There would be hikes in products which are based on sugar such as confectionary (items)... In confectionary items you cannot raise the price, but weight may get reduced. I do not think there should be price increases in other consumer products because the input prices are not going up.
Any updates on the consumer durables business?
The business is growing very well, especially refrigerators, washing machine and air conditioners. We are currently test marketing an affordable refrigerator priced at Rs2,500-3,000 in Andhra Pradesh. We think there is big demand in India and the project is being taken forward.
Comment E-mail Print Share
First Published: Mon, Aug 31 2009. 10 33 PM IST