HDFC gets nod to invest Rs 3,240 crore in realty

Cabinet also approves changes in B'lore airport agreement.

The Cabinet Committee on Economic Affairs (CCEA) today cleared foreign direct investment of Rs 3,240 crore by Mauritius-registered and HDFC-sponsored Indian Offshore Real Estate Investment (IOREI) in HDFC International Real Estate Fund.

An official spokesperson said the IOREI will invest $720 million in the units issued by HDFC International Real Estate Fund while HDFC will contribute the remaining $30 million domestically by subscribing to the units of the international scheme (HDFC International Real Estate Fund).

Meanwhile, the Union Cabinet, which also met today, approved the changes in the concession agreement for the Bangalore International Airport Ltd (BIAL). The changes will bring in increased scope for work and specification which has increased the cost to Rs 1,930.29 crore from Rs 1,411.79 crore.

The additional cost of Rs 518.5 crore is to be funded through additional debt by BIAL. While Rs 450 crore will be raised from lenders, the remaining Rs 68.5 crore will be raised through advance security deposits from third party service providers. The revised debt equity ratio would now be 3.63:1 against 2.25:1 earlier.

The HDFC Property Fund is a venture capital fund registered with the Securities and Exchange Board of India. The fund was set up last year and has launched two schemes "" the HDFC India Real Estate Fund with a corpus of Rs 1,000 crore and the HDFC IT Corridor Fund with Rs 464 crore. The HDFC International Real Estate Fund is its third proposed scheme aimed at raising funds from international investors.

IOREI is the company which will collect funds from international investors and invest in the units issued by the international scheme.

A spokesperson said the investments by HDFC property fund would be subject to FDI policy in the real estate sector including non-permissibility of repatriation of original investment before three years from completion of minimum capitalisation.

The CCEA also approved a non-plan budgetary support of Rs 124.37 crore towards outstanding dues, salary and wages for the first six months of the calender year 2006 for 15 Central public sector enterprises.

The 15 PSUs include Andrew Yule, Bharat Heavy Plates and Vessels, Bharat Wagon, Hindustan Cables, HMT (Chinar Watches), HMT (Watches), National Instruments Ltd and Tungabhadra Steel Products Ltd.

The CCEA also approved the emergency coal production plan of Mahanadi Coalfields Ltd which includes floating tenders to outsource coal production for 20 million tonne per year capacity.

It also approved enlarging a rail bridge over the Ganga near Patna to include a road bridge at a cost of Rs 1,398 crore. The enlarged rail-cum-road bridge will be ready in five years.

Under the emergency coal production plan, the Bharatpur Opencast Coal Mining Project of Mahanadi Coalfields Ltd will produce 20 million tonne of grade F coal from 11 million tonne at present.

The CCEA has also approved floating of tenders to outsource incremental overburden removal corresponding to 9 mt additional coal production for an initial five years.