Bangalore-headquartered publicly-held realtor Brigade Group is planning to raise around $200 million (Rs 800 crore) for two of its special purpose vehicles at its upcoming 40 acres project ‘Brigade Gateway’.
“We want to bring in private equity players into our ‘Gateway’ project and are in discussions with some of the players in the market,” M R Jaishankar, chairman and managing director, Brigade Group, said on the sidelines of launching the ‘World Trade Centre’ project here.
He, however, declined to give a timeline for the equity infusion saying, the deals were expected to be closed soon.
“Gateway” is an integrated project comprising of both commercial, retail and residential space. In commercial space, the company had received the license from ‘World Trade Centre’ to launch its project for an investment of Rs 1,000 crore for a built-up area of 1 million square feet. This commercial complex will have 30 storeys and as of now it is the tallest building in Bangalore city.
“This is the second world trade centre after Mumbai and we hope to get encouraging response from clients to occupy this space,” he added.
The company is set to float two SPVs at the project level. While the first SPV will be for the world trade centre project, the second will be for the residential and retail space that are part of this integrated township.
“The dilution will be 25 per cent to 50 per cent depending on the valuation,” Jaishankar said. Brigade Group had earlier received an enabling resolution from shareholders to raise up to Rs 750 crore through qualified institutional placement (QIP) route as part of its capital infusion plans.
However, top officials said the company might consider a reduction in its fund raising through the QIP route if it would be able to rope in PE investors at the SPV level.
“QIP plans are on the cards and is likely to happen in the next two quarters. However, we may reduce the amount to be raised to Rs 500 crore if strategic investors come on board on the SPV level,” Jaishankar said.
The present Rs 800 crore fund raising will determine the amount of fund raising through qualified institutional placements (QIP) route, he added.
He, however, declined to comment on the extent of dilution of promoters’ stake due to the QIP.
Brigade Enterprises had also mandated J P Morgan as the consultant for advising the company to raise around Rs 500 crore to ramp up its hospitality business.
The realtor who plans to develop around eight to 12 million sq ft this fiscal, had already launched 2 million sq ft in the first quarter.
The real estate developer has a debt book of Rs 750 crore with a leverage of 0.63 times by the end of March, 2010.
It has posted close to four fold rise in its net profit to Rs 13.92 crore in April-June period of FY11 as compared to Rs 3.86 crore reported during the same time last year.
Net sales of the company increased by 47 per cent to Rs 85 crore during the same period from Rs 57.83 crore last year.
