HSBC, ABN Amro eye a slice of Lok Housing pie

MUMBAI: Foreign and domestic investment funds such as HSBC, ABN Amro, IDFC and Reliance Capital are in talks with real estate firm Lok Housing and Construction to pick a minority stake in the company. The Mumbai-based firm is in the process of raising Rs 500 crore by offloading 10% stake in the company.

When contacted, CMD Lok Housing, Lalit C Gandhi said: “We have met all these funds firms and negotiations are on with some of them. No deal has been signed so far.” The company board has already taken a decision to raise funds from the domestic as well as the international market through issuance of ADR, GDR and QIP, not exceeding $200 million, for its expansion activity. The share of Lok Housing and Construction rose 4.11% on BSE to close at Rs 148.35 last Friday.

Currently, Lok Housing is in the process of consolidating its operations by merging its three group companies — Lok Shelter, Lok Global and National Construction (LGNC) and Lok Holding with itself. Lok Shelter is involved in urban rehabilitation and reconstruction projects while Lok Holding and Construction acquires land across India.

LGNC is engaged in infrastructure construction, senior Lok Housing officials said. Lok Housing holds a land bank of 1,222 acres across the country with a development potential of 62.5 million sq ft.

Industry sources said the legal battle between the Union government and Lok Housing over 175 acres of saltpan land is at the final stage and the case is likely to come up for hearing before the Bombay High Court by the end of this year. Earlier, the HC had set aside three legal suits filed by the Union government against Lok Housing and Suresh J Thanawala, the original owner of this vast swath of land in Turbhe, Navi Mumbai. Mr Thanawala sold the land to Lok Housing in 1994.