Modern India In Talks With PE Firms

Real estate and textile firm Modern India Ltd said it is in talks with private equity players to dilute the founders’ stake and sell stake in its special economic zone unit.

Mr. V K Jatia, Chairman and Managing Director, Modern India Ltd, said, “We are in talks with 2-3 players, and we will finalize in the next one to one and a half months”.

There could be two different transactions, one for Modern India Ltd and another for the SEZ, he said, adding both transactions may happen simultaneously.

The founders’ stake in the firm is at 89.51% at the end of December quarter, according to BSE data. This has to be brought down below 75 percent as per regulatory norms.
Further Mr. Jatia said, “As of now the deadline is April 30, but there have been a lot of public and private firms which have not been able to achieve this, because of market conditions. So the government is now considering extending the deadline”.

Modern India subsidiary Modern India Property Developers Ltd is setting up an information technology SEZ with an investment of almost 9 billion rupees near Mumbai on a 37 acres land at Khapoli.

This SEZ is expected to be funded through debt and equity of 2.5 billion rupees.
Mr. Jatia said that the firm has an in-principle tie-up for debt, and as soon as the feasibility report is made, one of the banks have agreed to fund part of the project and do the syndication.

Jatia declined to give a figure for the proposed deal.

The firm is also in talks for a land deal near Mumbai to set up a free trade warehousing zone.
Mr. Jatia added that the firm’s monthly rental collections will more than double to 20 million rupees after June, from between 7.5 million rupees and 8 million rupees a year ago, due to an increase in rental income. He said the firm has raised the rentals for its central Mumbai business center to 250 rupees per square-feet from this month compared with 70-85 rupees square-feet. There will be an increase in rental in coming months from other tenants.

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  1. Posted April 15, 2008 at 6:05 am | Permalink

    India’s annual wholesale price inflation rate jumped to its highest since November 2004, raising expectations of a central bank policy response when it holds a review at the end of the month.

    The wholesale price index rose 7.41 percent in the 12 months to March 29, accelerating from the previous week’s annual rise of 7.0 percent, government data showed on Friday. It was above a median forecast of 7.03 percent in a Reuters poll of analysts.

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