Expect Godrej Properties IPO within next 3 mths: Adi Godrej

Adi Godrej, Chairman & MD of Godrej Industries said that he expect Godrej Properties IPO to come within next 3 months. The valuation will be decided few days before Godrej Properties IPO. He feels that there is little sense to value property business on NAV basis. Property companies should not be valued on NAV basis but should be valued by using DCF method.

He further said that the company may form ventures with Godrej Group companies having land bank. Merchant Bankers will be deciding on price ahead of issue. He said that there are no plans to transfer land from one Godrej Group company to Godrej Properties. The JV’s with group companies will vacant the develop land. Residential demand is fully recovered. Residential housing demand has picked up significantly while commercial real estate is still to recover. Godrej Group is not looking at monetizing investment in Godrej Properties, he added.

Godrej Properties IPO is likely to come in the next 3 months. The company filed draft DRHP in May 2008 and it received SEBI clearance in July 2009. ICICI Sec and Kotak Mahindra Bank were the bankers to issue. Entire funds raised through the issue may go to Godrej Properties. There will be no sale of shares by Godrej Industries. About 94.29 lakh shares will be offered in the issue which makes 13.5% stake of the company. Reports suggests that 3.5% stake will be offered in pre-IPO placement. The fund raised will be used to acquire land and repay loans.

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