Lavasa gets SEBI’s green signal for IPO

City development and management firm Lavasa Corp has received Securities Exchange Board of India (SEBI)’s nod to float its maiden public issue. SEBI cleared the proposed IPO on November 7.

Lavasa had filed for its initial public offer to raise Rs 750 crore ($125 million), four years after a previous attempt did not materialise. The firm, which had previously hit headlines over alleged violation of environmental norms, has cut the proposed size significantly to just a third of the original proposal where it sought to scoop up Rs 2,000 crore.

Lavasa, a subsidiary of construction firm Hindustan Construction Company, is engaged in the development and management of Lavasa, a hill city development in the state of Maharashtra.

As of June 18, 2014, it had approximately 10,574 acres of largely contiguous land available for development within this designated area. This land consists of approximately 10,119 acres of land that it has purchased and 455 acres of land is held on lease by the firm.

It expects to purchase an additional approximately 5,959 acres of land within the hill station notified area on an opportunistic basis.

Over time the firm expects to shift its revenue strategy so that an increasing proportion of revenues will be derived from revenues from businesses and service fees derived from visitors and residents located at Lavasa.

Notably, this is the second attempt of the firm to go public. The firm had filed its documents in 2010 to raise money through an IPO back in September 2010. It had received regulatory nod for the public issue in November the same year but did not go ahead with the issue.

Besides its majority owned promoter, the company counts amongst its key shareholders Avantha Realty. Avantha Group chief Gautam Thapar separately owns a small stake in Lavasa taking the total group exposure to over 17 per cent while Venkateshwara Hatcheries owns 7.8 per cent. Lavasa has been associated with shareholding of politician Sharad Pawar’s close relatives.

Axis Capital, Kotak Investment Banking and ICICI Securities are managing the proposed issue.

(Edited by Joby Puthuparampil Johnson)

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