JP Morgan Chase Invests in Alok Infrastructure's SPV
Global financial giant JP Morgan Chase is investing Rs 130 crore for a 33% stake in a Special Purpose Vehicle (SPV) of Alok Infrastructure, a wholly-owned subsidiary of Mumbai-based Alok Industries, according to banking sources.
Project Details
- The SPV, receiving the JP Morgan funding, will develop a realty project at a prime location in Mumbai.
- Alok Infra owns land at several prime locations in Mumbai, some of which were acquired in high-profile transactions over the past year.
Market Dynamics
- A falling stock market and a sluggish realty sector have brought down the valuation of realty firms, forcing Alok Infra to seek investment at the project or SPV level.
- Alok Infra may be exploring additional funding through the private equity route for its various projects.
Ongoing Projects
- Alok Infra's largest project under execution is the 180-acre textile SEZ at Silvassa in the union territory of Dadra & Nagar Haveli, which obtained formal government approval last December.
- Parent Alok Industries plans to occupy one-fifth of the SEZ space for its textile and apparel units.
- The company is in talks with other textile makers for space in the SEZ.
Recent Acquisitions
- Alok Infrastructure acquired a 50% stake in Ashford Infotech earlier this year, which will develop a million sq ft of space for Rs 400 crore.
- Ashford Infotech, now equally owned by Alok Infra and Ashford group, had previously purchased a 6.92-acre plot from CEAT in a Mumbai suburb for Rs 130 crore.
Parent Company Overview
- Alok Industries reported:
- Net sales of Rs 2159 crore
- Net profit of Rs 200 crore for the year 2007-08.
- Alok exports its range of textile products to 58 countries, contributing nearly half of the company’s sales.
- The company has a presence across all textile segments and is strengthening its retail presence in India and the UK under the H&A brand name.
- The retail division is being hived off as a separate wholly-owned subsidiary, Alok Homes and Apparel.