Shree Ram Urban Infrastructure, the real estate business of Kasliwal family, is planning to raise around Rs 90 crore from foreign institutional investors (FIIs) UTI Rainbow Fund, IPRO Funds Ltd and Cresta Fund Ltd.
The funds are investing in the company, earlier known as Shree Ram Mills, by subscribing to 6,452,000 fresh equity warrants convertible into one share each, VCCircle has learned from sources. This could amount to a 23% stake post conversion in Shree Ram Urban Infrastructure. The warrants are being allotted at Rs 140. Shares of Shree Ram closed at Rs 131.8 on Tuesday.
The firm is also looking to raise another Rs 150 crore from foreign investors in the next six months. The board of Shree Ram Urban Infrastructure is expected to meet today to decide on the issue of warrants. An email sent to the company, seeking a confirmation on these developments, did not elicit any response at the time of publication of this article.
The company has about 68,000 square meters of space in Worli, of which around 28,000 square meters is under development. The funds raised will be used for existing projects in Worli and payment of liabilities. The company may also look at acquiring land assets and developing new projects. It reported net revenue of Rs 39.15 crore for FY09 with a net loss of Rs 9.6 crore.
FIIs have been aggressively buying shares in India's resurgent real estate. Rainbow Fund is managed by UTI International, a wholly-owned subsidiary of UTI Asset Management. Mauritius based IPRO Funds Ltd also recently invested over Rs 88 crore in Ansal Properties & Infrastructure Ltd (APIL), a Delhi-based real estate development company.