Global private equity funds Temasek and Sequoia are understood to be advanced stages of finalising a combined investment of close to Rs 200 crore in Bangalore-based realty developer Prestige Estates Projects. This will be part of the pre-IPO placement, which Prestige will be executing ahead of its proposed public offer.
Prestige recently filed a draft red herring prospectus (DRHP) with the market regulator Securities and Exchange and Board of India and according to estimates is eyeing to mop up nearly Rs 1,200 crore through the public offer.
For the year-ended March 31, 2009, Prestige reported a net profit of Rs 70.73 crore on a total income of close to Rs 920 crore. For the period of April-August 2009, its profit after tax was at Rs 66.51 crore on a total income of Rs 437.85 crore.
Prestige in its DRHP has stated that it had completed 142 real estate projects of approximately 27 million sq ft. It owns development rights for 52.57 million sft of developable area, which includes 24.49 million sft of saleable area and 9.64 million sft of leasable area. As of October 31, 2009, the land bank is at 250 acres.
According to Prestige, its networth is Rs 705 crore and book value per equity share on a consolidated basis stood at Rs 751 as on August 31, 2009. At the existing share capital, the company had earnings per share of 2.9 for FY09.
The objects of the issue are to fund ongoing projects, finance the acquisition of land and repay certain loans of the company. Prestige had earlier raised around Rs 450 crore through private equity from Red Fort Capital at some of its special purpose vehicles.
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Prestige has an existing joint venture with an associate firm of CapitaMalls (a large developer and operator of malls in Asia) to develop retail projects in south India at Bangalore, Mysore, Mangalore, Hyderabad and Kochi. It also entered into a JV with CapitaMalls to manage the retail malls developed by the joint venture.
The book running lead managers to the issue are Enam Securities, JP Morgan India, Kotak Mahindra Capital and UBS Securities India. If the IPO from Prestige takes off as planned in the near future, it will join Bangalore-based realty developers — Puravankara and Sobha Developers who have tapped the public markets.
Industry information also indicates that other Bangalore-based realty players Nitesh Estates and Shriram Properties are also lining up public offer plans during 2010.