NAFIS, Shabbir Husain

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Morgan Stanley invests INRs 675cr in Oberoi Construction of India.

with 2 comments

Source Times of India:

  • In the single largest FDI in the country’s booming real estate sector, Morgan Stanley has invested $152 million (Rs 675 crore) in a city-based firm, Oberoi Construction.
  • The world’s largest private equity realty fund, which manages $100 billion (one-seventh of India’s GDP), will in return get a 10% stake in the three-decade-old unlisted company which has a land bank of 15 million sq/ft, most of it in western suburbs of the city. The deal has valued Oberoi at Rs 6,750 crore.
  • Anand B Madduri, an ED at Morgan Stanley, said the three drivers that attracted the fund were the property developer’s execution of projects, entrepreneurial vision of promoter and delivering housing and commercial establishments to a community.
  • Oberoi said the money can be leveraged to raise around Rs 2,500 crore of debt for speedy execution of projects that will give him a cash flow of $1b in 3-4 years.
  • The scramble for buying assets was evident recently when three prominent real estate companies-Hirandani Constructions, Rahejas and Unitech raised close to $2.3 bilion from the London market.
  • Last year, US’s Farallon Investments along with LN Mittal had invested close to Rs 1,429 crore in four real estate companies of IndianBulls, a financial services firm which diversified into property development.
  • Ten Indian real estate companies have raised money by selling shares to the public, which eagerly lapped up the issues.
  • Industry sources say around 150 foreign PE have lined up nearly $10 billion to invest in real estate in the next two years as government relaxes norms to ramp up the country’s inadequate infrastructure. Indian and multinational institutions such as J P Morgan, Falcon, 3i, Blackstone, Carlyle, Kotak Real Estate, IL&FS, ICICI and HDFC are some of them who are waiting to storm the sector.
  • ICICI Realty fund is learnt to be raising $1 billion and Kotak Mahindra $500 million.

Seems like more investment is on its way. This will lead to price hikes and beyond reach to even think of buying a house for a normal person. Are these price hikes justified? Is this organic growth or hyped? Is it in any way benefiting the common man of India?

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Written by shabbirhusain

January 19, 2007 at 10:16 am

Posted in Business, India, Real Estate

2 Responses

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  1. I hope this will make my Morgan Stanley stocks go up so I make some money on it 🙂 http://www.trendio.fr/word.php?language=en&wordid=1417

    Snexlex

    January 25, 2007 at 4:50 am

  2. John Mack is making every possible effort for the same. So I believe MS is a buy. He has lined up a host of investments in emerging economies. This is a win-win for all emerging ecomonies and the investors. All the best and congrats in advance! 🙂

    shabbirhusain

    January 26, 2007 at 1:31 am


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