This Article is From Jul 02, 2014

Hindustan Construction Decides to Take Lavasa Public, Files for Rs 750-Crore IPO


Private township developer Lavasa Corporation, which is a subsidiary of the engineering and realty major Hindustan Construction Company, on Tuesday said it plans to mop up Rs 750 crore through an initial public offering (IPO).

The company said proceeds from the IPO will be used to fund its growth. However, it did not say how much equity the promoters will divest through the public float.

"Lavasa Corporation, a subsidiary of Hindustan Construction Company, has filed its draft red-herring prospectus with the market regulator Sebi on Tuesday to go in for an initial public offering of equity shares of Rs 10 each aggregating to Rs 750 crore," the company said in a filing to the BSE.

The public sale of shares is subject to requisite regulatory approvals, market conditions and other considerations, the statement added.

"Lavasa is finally back on track after almost three years of delays on account of government interventions. Consequently, Lavasa is now a developer tasked with conceptualisation, design, compliance, sales and marketing functions. The project will need additional funding," its chairman and managing director Ajit Gulabchand had said in the annual report for financial year 2013-14.

At least 75 per cent of the shares on offer shall be allotted to qualified institutional buyers (QIPs), 15 per cent to non-institutional bidders and 10 per cent to retail investors, the company said. It may allocate up to 30 per cent of QIB category to anchor investors and 5 per cent of QIP portion to mutual funds only.

It further stated the rest of the QIB portion shall be available for allocation on a proportionate basis to all QIB bidders other than anchor investors, including MFs.

The company has its flagship hill station project at Lavasa near Pune, spread over 10,000 hectares.

While the first phase is near complete, the proposed commercial business park, in the second phase, is likely to be completed by October 2015.

So far, the company has handed over more than 600 residential units to city management service department and over 500 units to customers.

Lead managers to the issue are Axis Capital, Kotak Mahindra Capital and ICICI Securities.

In FY14, Lavasa had improved its balance-sheet by narrowing its losses to Rs 5.7 crore, down from Rs 78 crore in FY13. Its sales in the fiscal stood at Rs 179.5 crore.