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Tata Realty to ramp up infrastructure portfolio, float InvIT

16 August, 2016

Tata Realty and Infrastructure Ltd, whose portfolio is heavy on real estate, is planning to ramp up its focus on infrastructure projects such as highways, roads, ropeway and light rail urban transport, and float an infrastructure investment trust (InvIT).  

The Mint newspaper reported that the company plans to invest Rs 9,000-10,000 crore over the next few years as it gears up to increase its focus on public works. 

“The objective is to build a larger infrastructure platform going forward, across many verticals, and also look at doing an InvIT. We will raise the money through debt, by divestment of stake in each project SPV (special purpose vehicle) and invest our own capital as well,” the report cited managing director Sanjay Ubale as saying.

It added that the subsidiary of Tata Sons Ltd will take up infrastructure projects mostly through public-private partnerships. 

The Mumbai-based company’s portfolio includes two ropeway projects (Dharamsala-McLeodganj and Palchan-Rohtang, both in Himachal Pradesh) and is in talks for two more such projects. A company promoted by Tata Realty and French group Vinci Airports SA – MIA Infrastructure – is one of the shortlisted bidders for the upcoming Navi Mumbai Airport. It is also in the process of acquiring three road projects from a road development company. 

In a separate report, The Economic Times said that Tata Realty is in advanced talks with a private equity fund managed by Australia’s Macquarie Group and State Bank of India to buy two road assets. 

The deal is likely to conclude in a few week’s time, the report said citing unnamed sources familiar with the development. The two projects are Farukhnagar-Jadcherla highway in Andhra Pradesh and Trichy Tollways, a portion of National Highway 45 that connects Chennai and Trichy.

Meanwhile, Tata Realty joins peers IL&FS Transportation and GMR Infrastructure in looking to raise funds through an InvIT. The Securities and Exchange Board of India has so far given approval to  MEP Infrastructure and IRB Infrastructure Developers Ltd to list their trusts. 

In the real estate segment, Tata Realty also plans to buy land with its investor partner for office projects and build more retail shopping malls, the Mint report said. The company has a joint investment platform of Rs 2,600 crore for office projects with Standard Chartered PE. It has sealed its maiden deal under the platform with M3M India to acquire a 25-acre SEZ project. The platform is also in talks to acquire projects in Pune and Mumbai. 

The company plans to have a portfolio of two projects each in Bengaluru, Chennai and Mumbai, and one each in Pune, Noida, Hyderabad and Gurgaon. It may look at listing its assets under real estate investment trust (REITs) after building a sizeable portfolio.

The company is also looking at acquiring retail assets to add to its malls portfolio that so far an asset in Amritsar and an under-construction property in Nagpur.

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Tata Realty to ramp up infrastructure portfolio, float InvIT

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