Four anchor investors are boarding Bangalore-based real estate developer Nitesh Estates as it opens its Rs 405-crore initial public offering on April 23.

Halbis Capital, an asset management specialist of HSBC, Nomura Japan, HDFC Mutual Fund and SBI Mutual Fund are believed to have signed as anchor investors pumping in Rs 60 crore into the public issue, said a source directly familiar with the developnment.

The entry of two marquee global investors and two of India's largest domestic MFs as anchor investors comes at a time when Nitesh priced the IPO band at Rs 54-56, significantly lower than the original plan of pricing it at over Rs 115 per share.

The lukewarm investor appetite for realty IPOs and a rather long pipeline of public issues from this sector has made it a tight-rope walk for Nitesh Estates. 

The realty player intends to use the IPO proceeds for developing 19 million sqft of real estate assets that is projected to rake in over Rs 800 crore of net income in the next 4-5 years. This is apart from the yielding assets such as India's first Ritz Carlton Hotel and large retail developments planned in Bangalore and Chennai. The new generation developer spearheaded by the 32-year-old Nitesh Shetty will pump in the cash raised through the IPO into various ongoing and planned projects and for repaying some debt. 

ICICI Securities, Kotak Mahindra Capital Co and Enam Securities are the lead managers for the issue. The issue closes on April 27.

The company is expected to attract a post-money valuation of around Rs 1,000 crore with the promoter holding at under 50%. Going into the issue, the promoter held 85% stake, with private erquity player Och-Ziff holding the remaining 15%. Och-Ziff will also make a part exit through the IPO.

The company had reported a turnover of Rs 87 crore with a net of Rs 2.5 crore in FY09. The topline is closer to Rs 100 crore in the just ended FY10, with a net profit estyinmates of Rs 8 crore. The latest fiscal numbers are not confirmed as they are still under audit.

Leave Your Comment(s)