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?

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 🙂


    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! 🙂


    January 26, 2007 at 1:31 am

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