JP Morgan Chase Buys 33% In Alok Infra’s SPV

Global financial giant JP Morgan Chase is investing Rs 130 crore for 33% stake in an SPV of realty firm Alok Infrastructure, a wholly-owned subsidiary of Mumbai-based textile maker and retailer Alok Industries, according to banking sources.

Alok Infrastructure’s SPV, which is receiving the JP Morgan funding, will develop a realty project at a prime location in Mumbai. Alok Infra owns land at several prime locations in Mumbai, some of which it bought in high-profile transactions in the past one year. Alok Infrastructure had been in negotiations with some private equity players to offload equity in the main company.

A falling stock market and a sluggish realty sector of late has, however, brought down the valuation of realty firms forcing Alok Infra, as many other realty companies, to go for investment at the project or SPV level. Alok Infra may be looking at raising more funds through private equity route for its different projects.

The company’s biggest project under execution is the 180-acre textile SEZ at Silvassa in the union territory of Dadra & Nagar Haveli. The SEZ obtained the government’s formal approval last December. Parent Alok Industries plans to occupy one-fifth of the SEZ space for its textile and apparel units. The company is also in talks with other textile makers for space in the SEZ.

Earlier this year, Alok Infrastructure acquired 50% stake in Ashford Infotech, which would develop a million sq ft of space for Rs 400 crore. Ashford Infotech, now equally owned by Alok Infra and Ashford group, had earlier purchased a 6.92-acre plot from CEAT in a Mumbai suburb for Rs 130 crore.

Alok Industries reported a net sales of Rs 2159 crore and net profit of Rs 200 crore for the year 2007-08. Alok exports its range of textile products to as many as 58 countries, which contributes nearly half of the company’s sales. The company has been present across all textile segments, including spinning, weaving, knitting, fabric, garment and home textile.

Lately, the company has moved up the value chain and is increasingly strengthening its presence in retail in India as well the UK. The company retails its products under H&A brand name targeted towards the mass market. The retail division is being hived off as a separate wholly-owned subsidiary by the name Alok Homes and Apparel.

One Comment

  1. Posted July 28, 2008 at 4:25 am | Permalink

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