Mumbai-based Oberoi Realty Ltd listed with 7.5% premium to its issue price and in early morning trade is quoting at Rs 292, 13% premium to issue price, valuing the company at Rs 9,586 crore(~$ 2.1 billion). At this level it is the fifth most valued realty firm in the country DLF, Unitech, HDIL and DB Realty.
Morgan Stanley Real Estate Fund is sitting on unrealised gains of 33% in its three and half year old investment in Oberoi Realty.
In January 2007, Morgan Stanley bought into the construction company by paying Rs 675 crore including Rs 596.7 crore through equity and Rs 78.30 crore through preference shares. Its average cost of purchase is pegged at Rs 217 per share. Morgan Stanley Real Estate Fund invested through SSIII (Special Situations Fund III).
Oberoi Realty raised Rs 1,000 crore in one of the many realty IPOs slated to hit the markets. Kotak, Enam, JP Morgan and Morgan Stanley were the book running lead managers for the IPO.
Promoted by Vikas Oberoi, a second generation entrepreneur, who took over the reins of the company started by his father Ranvir Oberoi three decades ago, the company came into prominence around ten years back after purchasing a large piece of land in Goregaon(Mumbai) from two chemical majors – Novartis and Ciba. It went on to buy large tracts of lands in Mumbai.
It planned to use the issue proceeds for construction of ongoing & planned projects besides land acquisitions, unlike many peers who seek to reduce their debt by going public.