Mumbai based real estate developer Lodha Group has raised $25 million from a fund formed by former Old Lane Fund partners. With this, the company has diluted 26% stake in its upcoming project, a 115-acre housing and office complex in Dombivli in Mumbai, reports ET.
The company is also in talks with various other funds who are interested in investment at the project level, Lodha Group Director Abhishek Lodha is quoted in the report.
The move, the industry believes, will help the company to increase its valuation ahead of its proposed initial public offering (IPO), which is scheduled to be held in October-November this year. The company is expecting a valuation up to Rs 20,000 crore at the time of tapping the capital markets. The company may sell 10-12% of its equity stake in the IPO with an expected price of Rs 3,000 crore. Lodha Group has hired Enam Securities and JP Morgan Chase for the IPO.
The proposed IPO may offer Duetsche Bank an exit route from its investment, which was structured around convertible debentures. Germany’s biggest bank led a group of private equity firms in investing $425 million in Lodha Group in 2007.
Apart from Lodha, at least six real estate firms are expected to hit the capital markets by December 2009. The firms include Emaar MGF, Sahara Prime City, Godrej Properties, Nitesh Estates and Shriram Properties.