Godrej Properties, a part of the $2.5 billion Godrej group, will raise up to Rs 1,000 crore of debt through qualified institutional placement (QIP) in the next 18 to 24 months, Group Chairman Adi Godrej said today.
Adi Godrej, who is also the chairman of Godrej Properties, said the real estate wing of the group is expected to be its largest revenue generator in the next five to ten years.
"The investment for the 90 million sq ft which we have across the country will be less for our model of business. But still, considering the total size of the property, we went public in the past. In about 18 to 24 months, we may have to raise further capital through an IPO or some other form. It depends on regulatory approvals," Godrej told media persons.
In January, the company raised around Rs 550 crore through an IPO. The company has lined up residential and commercial projects in cities like Ahmedabad, Bangalore, Mumbai, Hyderabad, Chandigarh and Kolkata. It is currently developing properties around 90 million sq ft across 25-30 projects.
According to Godrej, the equity dilution for the debt will be 5 to 10 per cent.
The promoters stake in the group is 83 per cent at present, he added.
Explaining the group's revenue expectations, he said the property division of the group will become the largest over the next five to ten years.
"Property business is the fastest growing business in our group. Mainly because affordable housing (is) what we offer. We think in five to ten years, (it) could be the largest in our group," he said.
He also said they expect to achieve a compounded growth rate of 25 per cent in group revenue.
"We think the growth will be 15 to 20 per cent organically. However, we see we can further grow on inorganic by another 10 per cent by acquisitions. This is on a compounded annual growth rate. So we will continue to look for acquisitions. The preference is to look first in India for acquisition and next comes developing countries," the Godrej chairman said.
He said they expect a strong revenue growth from the rural Indian market. According to him, the present revenue mix from rural and urban markets stands at 30:70.
The company is betting on a good monsoon and government schemes to boost the purchasing power in rural areas.
He ruled out any acquisitions in the near future. "I do not expect any acquisition in the future. But there can be some in the next two to three years," said Godrej.
