IIML to sell stake in Bangalore township1 min read . Updated: 10 Apr 2013, 10:38 PM IST
PE firm IL&FS Investment Managers Ltd will sell its stake in Bhartiya City, an integrated township project in Bangalore
Private equity firm IL&FS Investment Managers Ltd (IIML) will sell its stake in Bhartiya City, an integrated township project in Bangalore, controlled by the promoters of Bhartiya Group and its subsidiary Bhartiya International Ltd.
The fund had invested ₹ 150 crore for a 26% stake in the holding company called Bhartiya Urban Infrastructure and Land Development Co. Ltd in 2007.
“IIML is currently discussing the exit options. It was a structured deal under conversion of compulsorily convertible preference shares with a time period," an executive with Bhartiya International said, requesting anonymity. “They will be exiting in this quarter."
IIML said it doesn’t comment on speculation. Delhi-based Bhartiya International, the flagship company of the Bhartiya Group, is a fashion house. It owns 30% of the project. The remaining 44% is owned by the promoters of Bhartiya Group.
Bhartiya Urban Infrastructure is in the process of developing an integrated city in north Bangalore. The 122 acre township includes residential, retail, hospitality and information technology special economic zone projects.
Archana Hingorani, chief executive officer and executive director, IIML, said in an analyst conference call on 28 January that assets under management of the firm in the quarter ended 31 March will be at $2.34 billion.
IIML, established in 2005, is one of the first real estate funds in India. The company has deployed $ 1.7 billion in 73 transactions, it said in a 31 December presentation.
The first phase of Bhartiya City was launched in November 2012 with 3.2 million sq. ft of residential area and 1 million sq. ft of commercial space meant for technology companies. In the previous quarter, it signed a deal with Hotel LeelaVenture Ltd to operate a hotel.
“We have already collected ₹ 160 crore for the 1.7 million sq. ft sold so far and we are expecting to receive ₹ 16,000 crore from the residential projects in phase one," said Ajay Malhotra, group chief financial officer of Bhartiya International, adding that it is in the process of signing deal with Pratibha Industries Ltd, an engineering, procurement and construction company.
According to Malhotra, the cost estimated for the residential project is ₹ 800 crore. The contract for constructing commercial space for information technology companies has been given to construction and infrastructure development company BL Kashyap and Sons Ltd.
Shares of Bhartiya International gained 0.65% to ₹ 200.75 in Mumbai trading, while the benchmark Sensex rose 1% to 18,414.45 points.