Kasliwals to spin off real estate arm
The Kasliwals, who control two textile firms - the S Kumars group and Shree Ram Mills - have decided to convert the latter as its real estate and infrastructure arm.
By Rajesh Unnikrishnan, TNN |
LONDON: Yet another business family is entering India’s burgeoning real estate and infrastructure market. The Kasliwals, who control two textile firms — the S Kumars group and Shree Ram Mills — have decided to convert the latter as its real estate and infrastructure arm. Its textile mills would be demerged into a separate company.
The group has also decided to sell 12% of its equity in Shree Ram Mills to private equity firms or real estate funds. Currently, the Kasliwal family controls an 87% holding in Shree Ram Mills.
The group has renamed Shree Ram Mills as Shree Ram Urban Infrastructure (SRUI) and the textile business activity of Shree Ram Mills will be transferred into a company called Shree Ram Textiles.
“SRUI plans to make real estate and infrastructure a long-term business activity for the group, which is known to be primarily in textile and ancillary industries. We want to take the lead in corporatising the real estate industry. The vision at SRUI is to be a high-end property developer delivering global standards in architecture,” Vikas Kasliwal, vice-chairman and CEO, SRUI, told ET.
He added that as per Sebi norms, the group has to dilute its holding in SRUI to 75%. “We are exploring various options to reduce our equity in the company. Various real estate funds and private equity firms are approaching us. We did not take any final decision so far,” he said.
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SRUI holds 17 acres of mill compound in Worli. This translates into a valuation of around Rs 2,000 crore based on the market rates in Worli.The company plans to leverage the Worli land bank to develop mixed-use concept of retail, residential and commercial projects. According to Mr Kasliwal, in the first phase SRUI would develop its land bank at Worli as a residential property. “We will be investing Rs 400 crore in the first phase to develop a high-end residential project. We are also buying lands in areas like Indore and Mysore,” he said. The domestic real estate market size is estimated at $12 billion and the industry is growing at a 33% CAGR and may touch $50 billion by 2010.
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