Mumbai: Textiles firm Arvind Ltd will get Rs 250 crore from sale of land to its equal joint venture with real estate firm Tata Housing to develop a township with a projected revenue of Rs 2,000 crore, a senior official told Reuters on Friday.
“We will start development in 3-4 months time. It is a long project because it’s a township - about 10,000 houses - so over the next few years it will keep showing in our books,” Jayesh Shah, chief financial officer, said over the telephone.
The Rs 125 crore project will encompass 9 million square feet of residential, commercial and retail space apart from a hospital, school and other civic ammenities.
Arvind — one of several textile firms that have recently ventured into real estate development -- had last year formed an equal joint venture with B. Safal group to develop about 1 million square feet of residential space in Gujarat.
The project, due for completion in 2012, is expected to generate revenue of Rs 125 crore, Shah said
Earlier this month, rival Alok Industries had told Reuters it expects to earn Rs 1300-1400 crore from the sale of commercial properties in Mumbai this financial year.
Other top textile firms Bombay Dyeing , Century Textiles and Provogue India are also intent on developing or selling valuable land parcels to boost cash flow and cut debt.
Raymond Ltd too has announced plans to sell one of its properties near Mumbai.
Arvind is looking to liquidate Rs 800-900 crore worth of land over the next 3 years, including the Rs 250 crore it expects from the JV, Shah said.
“Currently we are focussing on the landbank that Arvind has to convert that into an earning asset,” Shah said.
Arvind’s shares, valued at nearly $405 million, rose as much as 7% on the news to Rs 75.7 in a firm Mumbai market