Sep 1, 2009

IPO Fever: Godrej Properties IPO in November

The initial public offering (IPO) season seems to be in its full swing with all the companies coming forward to collecting money from the markets.

The next to join the trend is Godrej Properties. According to reports, the proposed Godrej Properties IPO could be floated as early as November. Mr Adi Godrej, the Chairman of the Godrej Group, said on Monday that the draft red herring prospectus has been approved by the Securities and Exchange Board of India (SEBI).

Under SEBI guidelines, Godrej Properties has 10 months to float the IPO.

But Mr Godrej said the IPO is likely to be out within 2-3 months. Godrej Properties plans to sell 13.5 per cent of its stake. Mr Godrej said that the stake sale will bring in fresh cash infusion and this will not be a case of promoters selling their stake. ?The proceeds from the stake sale will be used by the company for its expansion,? he added.

Regarding the company?s expansion plans, Mr Godrej said that the affordable housing segment, broadly the Rs 5-25 lakh segment, has seen tremendous demand and the company will continue to focus on this segment. Ninety per cent of Godrej Properties? housing projects fall under the affordable housing category, he said.

He said the company is coming up with affordable housing projects in Bangalore, suburbs of Mumbai, Pune, Kolkata, Ahmedabad and Chandigarh.

?Costs of cement and steel are coming down and this along with lower mortgage rates forms a suitable atmosphere for undertaking affordable housing projects,? said Mr Godrej.

Source: The Hindu Business Line.



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