 "Shriram Properties raises $80 mn from Tata Opportunities Fund")
With this transaction, TOF has consummated its second investment outside the Tata group, taking its total commitments to almost 50 per cent of the fund. The fund’s prior investments have been into Ginger Hotels (an economy hotel chain), Tata Sky (pay TV) and Varroc Engineering (an auto component company). The fund has been invited to nominate persons for appointment on to the SPPL board. Sprout Capital Advisors LLP advised Shriram Group in its exclusive discussions with TOF.
Shriram Properties has about 50 million sq ft under development across Bangalore, Chennai, Coimbatore, Kolkata, Vishakhapatnam and Hyderabad. SPPL has received investments from global and domestic investors including TPG, Walton Street Capital, Starwood Capital, ASK Real Estate, Prudential ICICI, Sun Apollo and Amplus. Following the fresh investment from TOF, the private equity firms hold about 60 per cent in Shriram Properties.
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Padmanabh Sinha, managing partner, Tata Opportunities Fund, said: “The Tata Opportunities Fund is delighted to partner with the Shriram Group. The fund believes that the residential real estate market, particularly mid-market housing, should see high growth on the back of increasing urbanisation, changing demographics and an up-turn in the economy.”
Murali, managing director, Shriram Properties, said: “The Tata Opportunities Fund and its team not only strengthen us financially, but also provide us a springboard to launch us into the next cycle of our growth and positions Shriram Properties favourably for an IPO in the near future.”
According to data from credit rating agency ICRA, for the financial year ended March 2014, SPPL reported an operating income of Rs 383.87 crore (provisional) and a net loss of Rs 26.93 crore on a consolidated basis, compared to revenues of Rs 376.45 crore and net loss of Rs 27 lakh in the previous year.