H-Energy, led by Darshan Hiranandani, is building LNG terminals in Maharashtra and West Bengal, part of a diversification plan of the Hiranandani Group
Mumbai: Niranjan Hiranandani’s family is investing around Rs3,500 crore to build liquified natural gas (LNG) terminals in Maharashtra and West Bengal, in a diversification for the Mumbai developer who built the iconic 250-acre Hiranandani Gardens township in suburban Powai.
Led by Darshan Hiranandani, Niranjan’s son, H-Energy (formerly known as Hiranandani Energy) expects to start commercial operation of its first LNG terminal at Jaigarh in Maharashtra by October. The Hiranandanis are spending around ₹ 1,700 crore in setting up the terminal and laying down a 60 km pipeline from Jaigarh to Dabhol that is expected to be ready by May 2018.
“It is a big diversification of the group. If it succeeds in the way he (Darshan) plans to do, in five years’ time, he will be bigger than me in terms of volume of turnover at least," Niranjan Hiranandani said in an interview.
The energy venture operates as a subsidiary of Niranjan’s realty firm Hiranandani Communities, which primarily focuses on building large townships across Maharashtra.
The company is planning to start construction of its second LNG terminal at Digha in West Bengal with an investment of another ₹ 1,700 crore. “It is an ambitious plan. There will be gas to Kolkata and even Bangladesh... all those tie-ups are all in the offing. Most of the permissions are there. We are working on the structuring and other things," he said.
In a telephonic interview Darshan Hiranandani said, H-Energy has devised plans to ramp up the energy business and is looking to bring in more professionals at the senior level.
It also expects to provide gas to retail outlets in the long term, he added.
“After a few years, the energy business would also get a professional CEO (chief executive officer). We are in a huge entrepreneurial growth phase. There are around 180 people today. We will add 250 people next year," said Darshan, who is also managing director of Hiranandani Communities.
The Hiranandani Group was founded in 1978 by Niranjan and his brother Surendra Hiranandani. Last year, the group signed one of India’s biggest real estate transactions by selling 4.5 million sq. ft of fully leased commercial offices within the complex to Canada-based Brookefield Asset Management.
While both brothers continue to jointly own the assets, they have separately started their own real estate businesses.
The joint assets could be worth around Rs10,000 crore and it would eventually be divided over the years, Niranjan said.
“Either we will develop, sell or divide the joint assets. We are in no hurry to do it. It may take 10 years at the most," he said.
Niranjan said his realty firm is also diversifying into building industrial warehousing parks, for which it is currently looking for strategic partnerships.
While the first warehousing complex is likely to come up in Pune, the company is also planning to set up similar properties at Nashik and Chennai soon. However, it would continue to focus on building townships, he added.
“I have 2,000 acres of land. I have more land than I need for the next 10-15 years to work on. I will have as much work then I’m doing now. I have started five projects of the size of Powai in the last 12 months. Earlier, I did one project in 10-12 years when I started," he said.
The Hiranandani family landed in a controversy in the past when father Niranjan Hiranandani and daughter Priya Vandrevala were engaged in a year-long court battle over property disputes.
In 2017, the Bombay high court directed Niranjan to pay around Rs519 crore as compensation to his London-based daughter for breach of trust and infringement of the terms of a business deal that both entered in 2006.