Shapoorji Pallonji Mistry, chairman of Shapoorji Pallonji Group, has bought out the 47 per cent stake held by ICICI in Afcons Infrastructure for around Rs 70 crore.
Also, the Shapoorji Pallonji group has bought an additional seven per cent from A H Diwanji, the present promoter of the group, at an undisclosed price, sources close to ICICI said.
The deal gives the Pallonji group virtual control over the city-based closely-held construction company. It is learnt that the Pallonji group has acquired the ICICI stake against tough competition from Punj Lloyd, Aban Lloyd Chiles, Gammon India and Hindustan Construction Company.
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A H Diwanji, managing director of Afcons Infrastructure, did not respond to a questionnaire from Business Standard. An Afcons source, however, confirmed deal. He added that a change in management is expected shortly.
According to sources, the total enterprise value of Afcons is estimated at around Rs 125 crore. The company had a debt exposure of around Rs 50 crore to ICICI. The financial institution had expressed its interest in selling its stake to a bidder in view of the large debt exposure of the company.
The promoters of the company have now decided to pre-pay part of the debt from the proceeds received from the deal with the Shapoorji Pallonji group, sources added.
The acquisition will further consolidate Pallonji Mistry's grip over the construction industry in Mumbai.
Mistry's group is responsible for building some of the largest skyscrapers in Mumbai, including the Oberoi, Taj Intercontinental, Bombay Stock Exchange, besides a bunch of flyovers. Mistry also has business interests in the Middle East.
Over the years, he has diversified into other businesses as well. His group had taken over SIV Industries, formerly South India Viscose, but the company has run into rough weather owing to failure in meeting environmental norms.