Wednesday, September 5, 2007

First venture-funded Indian real estate company, QVC Realty of Bangalore, plans to invest Rs 2,500 cr for two townships in Gurgaon

The company has already raised 100 million dollars (Rs. 410 crore) from IL&FS Realty, the real estate fund of private equity firm IL&FS Investment Managers Ltd. Interestingly, IL&FS Realty will own 100% stake in the company initially, and the management will get a stake on delivery.

A part of this, 100 million dollars, has been utilised for buying the land. QVC would meet the development and construction cost from debt, internal accruals and equity at project level.

"We have acquired 200 acre land in Gurgaon for developing two townships of 100 acre each. The estimated investment in these two projects would be about Rs 2,500 crore,"company's founder and CEO Prakash Gurbaxani said, as per today's zeenews.

However as per DNA Money: “In four years, the combined capital value of the two projects (Gurgaon and Bangalore, at that point of time this was the plan) is expected to touch Rs 3,000 crore,” said Mr. Gurbaxani in April.

The two partners have not yet decided on a fixed profit sharing ratio. (!) “However, the management (QVC and IILM) may take their respective stake on delivery of projects,” said Shahzaad Dalal, managing director, ILFS Investment Managers. IIML has also committed to partner QVC in all its future real estate projects, according to Dalal.

The IL&FS Realty Fund is a private equity fund, mandated to invest in equity/ equity related instruments of Indian Companies operating in the Real Estate sector and related areas. The Fund will seek to achieve a gross investment-level leveraged annual internal rate of return in excess of 25%. In addition, the Fund will target a cash-on-cash stabilised yield on equity exceeding 8% per annum for income-generating projects

IL&FS Investment Managers Limited (IIML) is one of India’s largest domestic private equity fund management companies, managing over US$ 1 bn on behalf of leading Indian and international institutions. IIML presently manages an array of funds focused on investments across infrastructure, real estate, life sciences, manufacturing, information technology, and consumer services. IIML is a publicly traded investment management company with Infrastructure Leasing & Financial Services Limited (IL&FS) being the principal shareholder

IL&FS is one of India's leading infrastructure development and finance companies. IL&FS was promoted by the Central Bank of India (CBI), Housing Development Finance Corporation Limited (HDFC) and Unit Trust of India (UTI). Over the years, IL&FS has broad-based its shareholding and inducted Institutional shareholders including State Bank of India, Life Insurance Corporation of India, ORIX Corporation - Japan, HSBC Group and Government of Singapore.

Prakash Gurbaxani, well known serial entrepreneur and one of the pioneers of ITeS industry in India, founded QVC Realty Ltd. in March 2007. QVC stands for Quality and Value for the Customer. He has over 20 years of experience in a wide variety of industries including real estate, construction, BPO and technology.

From June 2005 to Jan 2007, Prakash Gurbaxani was the CEO of TSI Ventures, a joint venture between Tishman Speyer, USA and India's ICICI Venture. TSI Ventures is a fully integrated real estate investment management and operating company with a mandate to identify, invest in and develop properties with a cumulative asset value in excess of USD 2 billion over the next 5 years.

As CEO, Gurbaxani’s responsibilities included directing all aspects of the business such as strategy, business development, design and construction, acquisition, sales and marketing, investor relations, fundraising, finance and property management.

Prakash Gurbaxani holds a Master's Degree in Construction Management from New Jersey Institute of Technology (NJIT), Newark, NJ , and a B.S. (major in Civil Engineering) from Regional Engineering College (REC), Nagpur, India.

Besides Gurgaon, Gurbaxani said the company was close to acquiring a project in Bangalore and is scouting for land in Hyderabad, Chennai and Pune to undertake more realty projects.

Mr. V S Kumar as VP Finance & Company Secretary, Mr. C J Balasubramanya as VP Design & Construction, Mr. Ramesh Jagirdar as VP Legal and Mr. David Finehirsh as its Sr. Business Analyst for Strategy & Acquisition joined Mr. Gurbaxani's team in the month of June.

Yes, Mr. Gurbaxani there is a lot of "Quality, Value, Convenience" for you and your fund mangers. Wish you all the best.