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US investment firm to pay $100 mn for DivyaSree stake

US investment firm to pay $100 mn for DivyaSree stake
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First Published: Fri, Feb 16 2007. 12 01 AM IST
Updated: Fri, Feb 16 2007. 12 01 AM IST
TPG-Axon Capital, a US-based investment firm, will acquire a minority stake in Bangalore builder DivyaSree Developers for $100 million, in a bid to get a part of one of India’s fastest growing segments.
Overseas funds are investing in Indian real-estate firms in order to get into a market that is growing at about 30% a year.
Morgan Stanley invested $152 million for a stake in Mumbai-based Oberoi Constructions.
Last year, Morgan Stanley also invested $68 million in Bangalore-based Mantri Developers and $65 million in Delhi-based developer Alpha G. Corporation.
Prodipta Sen, vice-president of marketing, Alpha G. Corp., said foreign companies are feeling more comfortable investing in Indian development companies.
“It just reflects the fact that private developers are coming out of their shells in terms of their business practices,” said Sen. “They’re more transparent and ethical.”
Southern expansion
DivyaSree is focused primarily on building commercial space in Bangalore, Hyderabad, Chennai and Kochi. Now, it hopes to expand within South India and build more hotel, residential and retail projects, said Bhaskar Raju, 36-year-old executive director of the company.
DivyaSree has four approved special economic zones, including two in Bangalore and one in Hyderabad, and is considering projects in eight new cities. “We want to capitalize our company well and focus on growth,”Raju said.
DivyaSree is a family-owned company that started as a construction contractor about 30 years ago. It moved into development in 1997. Currently, it has a land reserve of about 350 acres and will have about 4 million sq. ft of projects under construction by June 2007, Raju said.
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First Published: Fri, Feb 16 2007. 12 01 AM IST
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