Real estate and infrastructure player Hindustan Construction Company plans to launch an initial public offering for its hill station project Lavasa and could raise between 1,000 and Rs 1,500 crore by the end of 2010.
"We are looking at October 2010 for launching the IPO. All our efforts are geared to bring the IPO around that time. The size of the offering would be 10 per cent of the then valuation of the project (Lavasa) which currently stands at Rs 10,000 crore," Lavasa Corporation President Rajgopal Nogja told PTI on the sidelines of the firm's conference here today.
At the conference the company announced that it has formed a joint venture with Space Investment Co LLC of America to set up a entertainment centre based on space technologies with an investment of Rs 400 crore.
According to Nogja the valuation of the Lavasa project could by 2010 go up to Rs 15,000 crore as people would start living in the township by the end of the current year itself.
The quasi-equity of a total of 4.5 per cent held by three banks - Axis Bank, Allahabad Bank and Bank Of India ¿ would be converted into equity at the time of the IPO, he said, adding these banks have together invested Rs 450 crore to acquire the stake at the current valuation of Rs 10,000 crore.
"While Axis Bank has 2.5 per cent in the company, BoI and Allahabad Bank hold 1.5 per cent and 0.5 per cent each. These would be converted in to equity at the time of the IPO. If in case, the initial offer does not happen, the conversion would take place at the end of five years," Nojga said.
Buoyed by the sale of all its 1,400 apartments and villas in the first phase of the township, the company has already started work for the phase II and plans to complete the project by 2016 instead of 2020 as scheduled earlier.
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The company is targeting a total revenue of Rs 1,47,000 crore from the project. The township is expected to have a total residential population of 20 lakh. While Rs 2,000 crore has been invested in the initial phase, Rs 3,000 crore would be spend on the second one.
HCC is currently talking to 20 companies for tie-ups in the hospitality, educational and recreational space for the hill station destination.
"These companies will hold between 1 per cent and 99 per cent in our various joint ventures for the project," Nogja said.
HCC has already inked partnerships with Apollo Hospitals, Symbiosis College and ITC hotels for Lavasa.
While HCC holds 65 per cent in Lavasa Corporation, Gautam Thapar-promoted Ballarpur Industries and Venkateshwara Hatcheries own 15 per cent and 13 per cent respectively, Nogja said.
About the entertainment centre, HCC Chairman and Managing Director Ajit Gulabchand said it would come up in 65 acres of land. "While we will invest 19 per cent of the cost of the centre, Space Investment Co will spend the rest".
To develop a Lavasa-like city in Dholera in Gujarat, Gulabchand said a host of other companies will be roped in for the project. "We will partner with a lot of companies for the city in Gujarat, just as we have done in Lavasa. They will bring in investment also," he said.
The company recently signed an MoU with the Gujarat government for creation of 'Water Front City' in Dhoera near Ahmedabad spread over 4,000 acres.