Shriram Properties to raise up to Rs 1,500 crore from PE funds

Shriram Properties is in advanced talks with 4 PE funds, to raise its equity up to Rs 1,000 to Rs 1,500 crore by the end of May. These PE funds also include the existing investors of Shriram Properties, which is an ancillary unit of Shriram Group, a Rs 60,000 crore entity. This builder king has shown his worth and his success rate can be seen by looking at Shriram Properties reviews.

Till date, Shriram Properties has raised funds up to $300 million from 6 PE funds, which include ASK Property Investment Advisors, ICICI Prudential, Star Wood Capital, Sun Apollo, TPG and Walton Street Capital.

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The Managing Director of Shriram Properties, M Murali said “we got a land bank of around 1,300 acres and discussion started to build 45 million square feet. Discussions are in various stages for 20 million square feet. We would require around Rs 1,000-1500 crore equity and discussions have started with various funds we hope to rope in four investors by end of next month.”

Asked whether the funds are ready to invest, given the market sentiment and poor returns, Murali said as far as returns, the company demonstrated it can be a good investment opportunity. ICICI Prudential exited with 27% IRR.

Another 12 million square feet are under construction, at a cost of around Rs 2,600 crore. Murali claimed that only 20% of the space is in stock, while the balance is sold. The company will start delivering from the next six months to three years.

He added, currently there are 15-20 mid size PE funds which are ready to invest around Rs 50-100 crore in a deal, 40 funds are ready to invest upto Rs 200 crore and there are six funds in the market, which are looking only investment above Rs 200 crore.

The company reported a turnover of around Rs 500 crore in 2013-14 as compared to Rs 378 crore in 2012-13 and set a target of Rs 750 crore in 2014-15. EBITDA during the fiscal was around 15-18%.

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