Godrej Properties IPO by year end

By ArchieIndian | Finance
13 Sep 2009

Godrej Properties Ltd

Godrej Properties Limited (GPL), the real estate unit of Godrej Industries Limited (GIL) is planning its IPO by year end as indicated by Mr. Adi Godrej (Chairman, GIL) yesterday. Godrej properties will offload 10% of its stake to public while it will offload 3.5% stake as pre-IPO placement to private equities (PEs).

After a major slump last year, the real estate industry has been making steady recovery over the past couple of months. The demand is coming back particularly in the affordable housing segment (Homes @ 25-50 lakhs), with property prices and interest rates coming down and its this segment that GPL is looking to tap. (However the demand in commercial and retail sector still remains small.)

GPL already has presence in Mumbai (5 residential projects, 1 commercial project) and Pune (1 residential project, 3 commercial projects) and is currently executing five residential and 4 commercial projects in Mumbai, Pune, Kolkata and Bangalore.

With economy showing signs of recovery and a buoyant looking stock market, which still has ample liquidity to digest more IPOs, investment in real estate might not be a bad idea.

To give readers a perspective according to an Economic Times (ET) report PEs have invested as high as 32% in real estate and infrastructure this year. (They surely are expecting real estate sector in India to do well.)

Also according to a recently held Real Estate Conference by CII on – “Turnaround in the Downturn” – An insight into the Current Real Estate Scenario, India is seen on the international real estate front as a hedge against the global economic downturn. (What it means is that foreign investors are seeing big investment potential in the Indian real estate sector though the outlook of real estate remains gloomy internationally. The housing sector might just see more FDI money coming in.) “We expect enhanced foreign capital inflow in the real estate sector in the medium-to-long-term,” Jones Lang LaSalle (a global real estate services firm) said in its report.

Real estate consultants believe that the real estate sector should start recovering by this year end Dec-2009 (Business Standard, 11-Sep-09). Looks like this IPO might just get its timing right. Lets see if it can get its pricing right too.

About Godrej Properties :

Godrej Properties was established in 1990 as a real estate development company within the Godrej Group of businesses. The company was originally incorporated as Sea Breeze Constructions and Investments Private Limited on February 8, 1985. The company’s name was changed to Godrej Properties and Investments Private Limited on July 2, 1990 and subsequently to Godrej Properties Limited on November 23, 2004. (www.godrejproperties.com)

About Godrej Group :

Started in 1897 as a locks manufacturing company, the Godrej Group is today an accomplished and diversified business house in India. Today Godrej is a household name as a provider of services in a slew of categories: home appliances, consumer durables, and consumer products, industrial and agricultural products. The group has more recently entered the real estate and information technology sectors, and management views these as avenues for future growth. (www.godrejproperties.com)

Current Projects :

Godrej Properties is currently having five residential projects in its kitty. Four of them (Planet Godrej, Godrej EdenWoods, Godrej Waldorf, Godrej Riverside) are in Mumbai, while one (Godrej Woodsman Estate) is in Bangalore. The company has an experience of executing five residential projects in Mumbai and one residential project in Pune earlier.

Godrej Properties is also executing four commercial projects (Godrej Waterside – Kolkata, IT Park Hyderabad, Godrej Eternia – Mumbai, Godrej Coliseum – Mumbai). Earlier the company has done three commercial projects in Pune and one in Mumbai.

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  3. NHPC IPO – Post listing strategy. Sell/Hold/Buy? Listing Price Predictions

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  • Ankur

    Godrej Properties has a very unique business model. Unlike other realty developers it does not own land banks. Instead it collaborates with landowners to develop a property, the profit is shared amongst the beneficiaries in a pre-determined ratio.

    For more info read : http://www.godrejproperties.com/Landowners.htm

  • Arkid

    Are we going to see a real estate boom again??

  • Ankur

    Godrej Properties has a very unique business model. Unlike other realty developers it does not own land banks. Instead it collaborates with landowners to develop a property, the profit is shared amongst the beneficiaries in a pre-determined ratio.<br />
    <br />
    For more info read : <a href="http://www.godrejproperties.com/Landowners.htm" target="_blank"><a href="http://www.godrejproperties.com/Landowners.htm</a>" target="_blank">http://www.godrejproperties.com/Landowners.htm</a></a>

  • Arkid

    Are we going to see a real estate boom again??

  • Sandip

    Not sure about a real estate boom so early, but a boom in IPOs of real estate companies is surely on its way.

    Back on the heels of Godrej Properties announcing its IPO plan, Oberoi Constructions has also indicated plans for its IPO during 1st quarter of next year.

    Infact according to a PTI report a couple of days back as many as 15 realty firms are planning IPOs in the next 6-8 months.

    It would be interesting to see whether the market is sufficiently liquid to absorb all of them. The realty firms certainly thinks so.

  • Sandip

    Not sure about a real estate boom so early, but a boom in IPOs of real estate companies is surely on its way.<br />
    <br />
    Back on the heels of Godrej Properties announcing its IPO plan, Oberoi Constructions has also indicated plans for its IPO during 1st quarter of next year.<br />
    <br />
    Infact according to a PTI report a couple of days back as many as 15 realty firms are planning IPOs in the next 6-8 months.<br />
    <br />
    It would be interesting to see whether the market is sufficiently liquid to absorb all of them. The realty firms certainly thinks so.

  • Bharat Momaya

    Federation of Edenwoods Housing Societies Ltd., Thane, where Godrej Properties Ltd.(GPL) Constructed a Housing Complex, have filed a legal case against GPL for breach of Consent Decree of 30th April, 2005. Honourable Thane Court had passed an order, inter alia, that GPL cannot sell / create third party rights on suit property. Case No. is 308/ 2009. In their Draft Red Herring Prospectus filed with SEBI, various legal cases against GPL are disclosed.

  • Bharat Momaya

    Federation of Edenwoods Housing Societies Ltd., Thane, where Godrej Properties Ltd.(GPL) Constructed a Housing Complex, have filed a legal case against GPL for breach of Consent Decree of 30th April, 2005. Honourable Thane Court had passed an order, inter alia, that GPL cannot sell / create third party rights on suit property. Case No. is 308/ 2009. In their Draft Red Herring Prospectus filed with SEBI, various legal cases against GPL are disclosed.

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