Indian real estate company Macrotech Developers Ltd, part of the Lodha group, plans to raise $450 million via a qualified institutional placement that will see its controlling family selling a stake of about 7%, two sources told Reuters.
The proposed stake sale underscores a recent deal boom in Indian real estate, where prices are expected to rise steadily in the next few years, roughly in line with overall economic growth, according to Reuters poll of experts.
Macrotech operates 85 million square feet of land and has 95 million more under development. It is known for its premium real estate, including a tie-up with former U.S. president Donald Trump for a building in the Indian financial capital of Mumbai.
The company has appointed investment banks Jefferies and Kotak to manage the deal, said the sources with direct knowledge of the matter, declining to be identified as a deal is likely to be launched in stock markets this week.
Buyers for the stake have yet to be finalised but Singapore’s sovereign wealth fund GIC and U.S. investment fund Capital Group had expressed interest, the sources said.
Lodha, Jefferies, Kotak and GIC did not immediately respond to emails seeking comment while Capital Group declined to comment.
A qualified institutional placement helps publicly listed companies raise capital from domestic markets without the usual standard regulatory compliance and allows only institutional investors to take part in the offer.
The Abu Dhabi Investment Authority bought a $400 million stake in India’s biggest real estate investment trust (REIT), Embassy Office Parks REIT, in September while Blackstone filed for a $500 million REIT IPO of its Indian malls portfolio, Nexus Malls, last month.
Rustomjee, another well known Indian realtor, listed its shares on Indian stock exchanges last month.
Macrotech operates both commercial and residential buildings and is betting on a broader real estate boom in India, one of the fastest growing economies in the world.
For the fiscal year that ended in March 2022, Macrotech‘S net profit jumped 270% to 12.6 billion rupees ($153 million) while revenue grew 69% to 92.3 million rupees.
Reuters