Hindustan Construction Company Ltd has raised Rs 100 crore from The Jammu & Kashmir Bank Ltd for its hill city project Lavasa Corporation Ltd. The bank has invested through convertible debentures that values Lavasa at Rs 12,000 crore.
Although, the company has not given out how much the debentures would convert into, at this valuation J&K Bank would own around 0.8% stake, when the conversion happens.
Lavasa is a subsidiary of Hindustan Construction Company Ltd that had earlier raised funds from various financial firms including Axis Bank, Bank of India, Allahabad Bank, Induslnd Bank, Andhra Bank, United Bank of India and ICICI Bank. These seven banks had invested a total of around Rs 850 crore with ICICI and Axis investing the lion's chunk of Rs 250 crore and Rs 225 crore, respectively.
The previous fund raising was at an equity valuation of Rs 10,000 crore for the hill city project and translates into unrealised gains of around 20% for other banks who have put money in the company. Lavasa is developing the project near Pune that is expected to be operational by end of this year.
Lavasa has been planning a public offering in the near future and the banks could look at converting their debentures into equity ahead of the issue. Besides Hindustan Construction, other backers to Lavasa include Gautam Thapar’s Avantha Group and Venkateshwara Hatcheries.
The project is being developed over an area of 12,500 acres. Besides residential areas, the town is expected to have business, educational and recreational facilities. It has in the past tied up with Accor, ITC and Apollo Hospitals to develop their facilities at Lavasa. It has also tied up with Oxford University and would be developing SpaceWorld, a 65-acre edutainment park powered by US-based National Aeronautics and Space Administration (NASA).