Riding high on the recent success of pure-play real estate biggies in the Indian capital market, another realty firm is taking one step further by aiming to list on London Stock Exchange to raise about Rs 1,520 crore (Rs 15.2 billion).
Ishaan Real Estate PLC, which is a listed fund with an initial portfolio of eight property assets and would be majority owned by real estate firm K Raheja Corp, is seeking to pool in funds from outside its domicile.
The company aims to raise $340 million (about Rs 1,520 crore), investment banking sources said, adding the issue has attracted good interest among Asian investors during the pre-marketing phase.
A couple of investors in Hong Kong and Singapore have already signaled interest in buying about 10 per cent of the available units, they said.
Market watchers say the company's move has sparked off excitement as this new route of raising funds from the market allows foreign investors to invest in the listing vehicle.
The initiative comes close on the heels of the Initial Public Offer floated by Parsvnath Developers, which was oversubscribed more than 61 times.
The offer received a good response from FIIs as the Indian real estate sector has matured and foreign investors were forced to shrug off their initial hesitancy, partly driven by the confusion over the regulatory framework for FII participation in the real estate issues.
The Ishaan offer, is jointly arranged by Deutsche Bank and JPMorgan Cazenove.
Meanwhile, a company statement that about 70 per cent of the funds raised from the listing would be used to buy 40 per cent stake in identified ready-to-go real estate projects.
The remaining 30 per cent would be invested over the next 12 to 18 months in a phased manner.
All the current and future assets in the company, would be real estate development projects that are eligible for foreign direct investment with focus on IT park developments and special economic zones.
The fund also plans to invest in commercial, hospitality, retail and residential projects.
The eight identified projects are based in or around Hyderabad, Mumbai, Bangalore and Pune and have total asset value of $851 million, the company quoted figures by real estate consulting firm Cushman & Wakefield.
The combined development costs for the projects in the initial portfolio are budgeted to be around $460 million, it said.
