The transaction is aimed at unlocking value, streamlining operations and paving the way for monetisation of a portfolio that includes land parcels spread across 2,000 acres in key real estate markets. The value of the assets is estimated to be around $6 billion (Rs 50 billion).
“The creation of a unified holding company and the consolidation of assets under this entity is in line with our strategic vision of optimizing operations and enhancing value creation,” Venkatesh Gopalakrishnanwho leads the new entity as managing director and CEO, told ET. “To drive operational efficiency and foster greater growth opportunities, we are positioning SPRE to leverage its scale by bringing together our diverse real estate portfolio.”
Easier access to financing
The holding company encompasses the group’s entire real estate portfolio, which includes 45 plots and projects, with a total development potential of around 13 million m², and there are currently projects under development totalling 2 million m².
According to Gopalakrishnan, who is also the Director of the Group Promoter Office, this portfolio has a total revenue potential of up to Rs 200,000 crore after development and consolidation, strengthening the company’s ability to execute large projects and providing confidence to its investors by ensuring transparency and maximum returns.
The group is considering taking the new company public in two years. “Now that all the assets have been consolidated under one umbrella, there will be a consolidated balance sheet and profit and loss account. The company has also been capitalised to the tune of close to $1 billion. With the formation of the holding company, we are definitely looking at a liquidity event in the next two years,” Gopalakrishnan said. It plans to raise around $800-900 million in the first phase through an initial public offering of a stake of around 10-12%. Further dilutions could follow, taking the public float to the minimum requirement of 25%, which would take the total raising to around $2 billion.
According to Gopalakrishnan, the new structure will enable value creation, proper capital structuring and easier access to finance. It will also facilitate access to public markets and private capital.
SPRE’s assets are concentrated primarily in five major cities: Mumbai, Pune, Bengaluru, Gurugram and Kolkata. It also owns large parcels of land in Mysore and Nagpur. The assets include both urban infill areas and large tracts of land between Mumbai and Pune.
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