Dawnay Day Puts Its Stake In Indian JV On The Block

Dawnay Day Puts Its Stake In Indian JV On The Block

By Madhav A Chanchani

  • 20 Aug 2008

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This news has been in the market for a few days now. The troubled property and banking conglomerate Dawnay Day International is planning to sell its 50 per cent stake in the Indian joint venture, Dawnay Day AV Securities Pvt Ltd, which was formed in 2005. Other stakeholders of the firm are Alok Vajpeyi, who set up the firm and holds 25 per cent stake, and the rest 25 per cent is owned by a employee trust.

Vajpeyi, who was previously with DSP Merrill Lynch, is not planning to sell his stake and is looking for a valuation of around Rs 160 crore, according to a report in Mint. The report adds that Dawnay Day is in talks with Hyderabad-based Karvy Stock Broking Ltd and several private equity players to sell their stake. The report added that Vajpeyi was last year in talks with Karvy for a partnership to expand the firm’s business.

Dawnay Day’s main business comprises of financial services, real estate and private equity. The firm offers stock broking and sells mutual funds and insurance policies of other firms, and is also planning to form an asset management company with a partner. Dawnay Day AV Securities, which is subsidiary of Dawnay Day AV, owns 60,000 sq. ft of real estate in Mumbai which could be valued at Rs 170-180 crore, the report added. The Indian JV also operates Dawnay Day AV Analytics, a financial research firm which will not be sold.

UK- based Dawnay Day Group has a $4 billion empire with a net worth of over $1.5 billion. The group has stakes in Austin Reed (a retail chain), the Lygon Arms in the Cotswolds, top London restaurant The Wolseley and a German department-store chain.

The company is one of the recent victims of the credit crunch and has sold off 20 per cent stake in F&C Asset Management for a loss of about $160 million. The group also sold its stake worth $6 million in two Aim-listed property companies it manages. Now the company has two property funds - Puma (UK commercial property) and Dawnay Shore Hotels (UK hotels). It is also planning to sell its investment banking arm Dawnay Day Investment Banking to a Portugese firm. The group has a huge empire with its two owners, Guy Naggar and Peter Klimt, who are directors of more than 900 companies.

The company has ambitious plans for Indian realty, where it plans to invest a $1.5 billion over the next few years through its realty arm Dawnay Day India Land Ltd, headed by Meher Karan Singh. The company’s real estate arm has invested $200 million in the country so far and has bought land in in Pune, Ahmedabad, Jaipur, Lucknow, Noida and Bangalore. It plans to set up 10 mid-segment hotels by 2010 and 30 properties with over 4,000 rooms by 2015. What will be the future of these plans remains to be seen.

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