Hyderabad: Hyderabad-based Ramky Group, which had revenues of Rs1,000 crore last fiscal, is set to unlock value of three of its entities that attracted investments from global private equity (PE) firms through initial public offerings (IPOs).
The group has three entities, Ramky Infrastructure Ltd, Ramky Enviro Engineers Ltd (REEL) and Ramky Estates and Farms Pvt. Ltd (REFL). The group is valued at around $3 billion (Rs11,880 crore).
Global PE players that picked up minority holdings in these companies include Infrastructure Leasing & Financial Services Ltd (IL&FS), Sabre-Abraaj Capital, Lehman Brothers Holdings Inc. and Deutsche Bank AG.
The first off the block with its IPO will be Ramky Infrastructure—a Rs720 crore company in revenues last year, which is mainly into developing industrial estates.
The company, which expects to close the current fiscal with a turnover of Rs1,100 crore, attracted an investment of Rs125 crore from IL&FS and Sabre-Abraaj Capital in December 2006 when it was valued at around Rs1,000 crore.
While preparations are under way to file the draft red herring prospectus with Securities and Exchange Board of India, the company plans to go public sometime in the first quarter of the next calendar year.
When contacted, Ramky Group chairman A. Ayodhya Rami Reddy said, “We have IPO plans for three of our group companies.” He refused to provide further details.
According to a Ramky Group official, who did not want to be named, the group plans an IPO for Ramky Infrastructure to raise Rs400-500 crore.
“The IPO will not only give an exit route to the private equity players, IL&FS and Sabre-Abraaj Capital, but it also allows the company to raise funds for executing orders on hand,” the official said.
Ramky Infrastructure currently has orders worth around Rs 4,500 crore on hand.
The next group entity that would go public is REEL, a waste management company that offers disposal of industrial hazardous waste and municipal waste, along with biomedical waste management and integrated environmental services.
The company has agreed to offer 10% stake to Lehman Brothers and Deutsche Bank and raise around Rs400 crore.
“The equity allotment and funds receipts would take place sometime in January or February next,” the official said. “The company plans to use these funds to go in for small-sized overseas acquisitions in the area of waste management with a focus on Europe, the US and Australia.”
He said REEL would prefer to wait for one to two years to improve its valuation and then go public sometime by 2009-end or early 2010. “By then, the company will have enough time to prove its capabilities in acquiring overseas companies and ramp them up,” he added.
REFL, a Rs100 crore real estate company in revenues, has also agreed to offer 10% stake at around Rs500 crore to IL&FS, Sabre-Abraaj Capital, Deutsche Bank, and Lehman Brothers. “The allotment and funds flow is likely to take place sometime in second quarter of next fiscal,” the official said.
Representatives of IL&FS, Deutsche Bank and Sabre-Abraaj could not be reached for their comments.