Borosil sells 18 acre for Rs 830 cr

MUMBAI: Borosil Glass Works has sold 18 acre in Marol, Andheri, to Neepa Real Estate for Rs 830 crore, reflecting a rapid demand in recovery in Mumbai’s realty market.

The transaction is higher than two major deals in suburban Mumbai this year — Sheth Developers’ acquisition of 14 acre from GTC in Vile Parle for Rs 591 crore and Wadhwa Group’s purchase of 18 acre in Ghatkopar for Rs 571 crore from Hindustan Composite. The deal translates into Rs 46 crore per acre, higher than the other two deals.

However, the transaction is way behind Lodha Developers’ acquisition of land in the central Mumbai suburb of Wadala for Rs 4,050 crore, the biggest-ever land deal in the city.

“Its a win-win deal for both the buyer and the seller,” said Anuj Puri, chairman and country head of Jones Lang LaSalle Meghraj (JLLM). “Marol promises to be an ideal location for developing prime residential property.”

The Borosil stock rose 5% to close at Rs 779.95 on BSE, putting the company’s market capitalisation at Rs 309 crore. The deal consideration is nearly two-and-a-half times the market capitalisation of Borosil. Borosil Glass will utilise the fund to expand its operations and retire debt, said Chetas Desai, MD of Ambit Corporate Finance, advisor to Borosil on the deal. Borosil’s debt stands at around Rs 50 crore.

However, it is not clear how much of the sale proceeds will be used by Borosil to expand capacity. “The Borosil promoteRs are yet to finalise the details of the expansion plan,” Mr Desai said.

Borosil, a 48-year-old company, is engaged in the manufacturing of sheet glass, laboratory glassware and microwavable kitchenware. Its main manufacturing operations are now located in Bharuch in Gujarat.

“In the interest of generating maximum value for the shareholdeRs , we considered this as an opportune time to unlock value from the sale of the Mumbai real estate property,” PK Kheruka, vice-chairman and managing director of Borosil, said in a media statement.

“We will evaluate and deploy the sale proceeds after due consideration of strategic business opportunities in a manner that will result in maximisation of shareholder value.” The real estate market in Andheri (E) has experienced immense growth in the past few yeaRs , primarily driven by rise a in demand for commercial space and IT/ITeS and residential development, a Borosil statement said.

“The area continues to witness rapid expansion driven by infrastructure expansion — on-going development of the Mass Rapid Transit System, Sahar elevated road and the Jogeshwari-Vikhroli Link Road,” it added.