Lodha may seek Rs 6,000 cr in largest IPO since 2010

Group will probably start trading in 2015

Lodha Developers, which is building the world's tallest residential tower, is planning an initial public offering that may raise as much as $1 billion, said people with knowledge of the matter.

The sale may value Mumbai-based Lodha at as much as Rs 60,100 crore ($10 billion), according to one of the people. The company will probably start trading next year, two of the people said, asking not to be identified as the deliberations are confidential.

Lodha is seeking a listing after home prices in Mumbai, the country's financial capital, more than doubled in the five years through March, according to data from Liases Foras Real Estate Rating & Research. A $1-billion IPO would be India's biggest since 2010, when state-owned miner Coal India's share sale raised Rs 20,430 crore ($3.4 billion), data compiled by Bloomberg show.

TO CONQUER ‘WORLD ONE’

• Rs 60,100 cr Amount at which the sale may value Lodha
• Rs 20,430 cr Amount Coal India had raised through a share sale in 2010
• 423 meters Height of the the 117-storey World One residential tower the group is building in Mumbai, which the company claims will be the world’s tallest
• 35 mn sq feet Company's area under development

The company is building the 117-storey World One residential tower, which it says will be the world's tallest at 423 meters (1,390 feet), according to its website. The development, which will feature apartments outfitted by Giorgio Armani SpA's interior design brand, is located in central Mumbai's Lower Parel district near the offices of Morgan Stanley and KKR & Co.

Lodha agreed to buy a Canadian diplomatic property in central London's Mayfair district in November for $493 million. In February, it bought another London property on Carey Street, close to the Royal Courts of Justice, for £90 million ($154 million) to develop a residential project.

Stock rally
The developer is reviving its IPO after seeking to raise as much as Rs 2,790 crore ($465 million) in 2010. Lodha has held discussions with investment banks about an IPO, though the process is at an early stage and no advisers have been hired, the people said.

"We are well capitalised to meet our business growth plans through our internal cash flows, and have no plans of raising capital through a public listing at this time," Lodha said in an e-mailed response to questions.

The S&P BSE Sensex has rallied 18 percent this year, the best performance among the world's 10 biggest markets, as foreigners poured $11 billion into Indian shares, data compiled by Bloomberg show.

India's benchmark stock index may double in the next three years after Prime Minister Narendra Modi laid the groundwork for strengthening Asia's third-largest economy in last week's budget, according to BlackRock Inc.

Lodha is building Palava, a 4,000-acre (16.2-square- kilometer) township near the planned second airport in Mumbai. The company, founded in 1980 by Chairman Mangal Prabhat Lodha, has more than 35 million square feet under development, according to its website.

Land purchases
The real-estate company has been purchasing land as the combined debt of India's six biggest listed developers climbed to a record Rs 39,400 crore as of March 31, from Rs 15,880 crore in 2007, according to data compiled by IIFL.

In 2010, Lodha bought a central Mumbai plot for Rs 4,050 crore from the Mumbai Metropolitan Region Development Authority, which it said was India's biggest land deal to date, according to the company's website. The company acquired a 17- acre plot in central Mumbai from DLF Ltd for Rs 2,700 crore in 2012.

Lodha posted sales of Rs 9,000 crore in the 12 months ended March 2013, the most recent year for which figures are available, according to the company's website. That's higher than billionaire Kushal Pal Singh's DLF Ltd, the largest listed developer in India, which reported sales of Rs 7,770 crore that year, data compiled by Bloomberg show.