Realty firm Sahara Prime City has announced its intention to raise Rs 2,000 crore over the next 12 to 18 months. This funding will contribute to the development of 217 integrated townships across India.
The company is focused on investing this amount in the initial phase of a comprehensive plan, which aims to see the creation of 102 townships. To secure these funds, Sahara Prime City is exploring both debt and private equity investments. This initiative comes as a result of the consolidation of the Sahara Group's real estate business under its umbrella as the holding company.
Sandeep Wadhwa, who heads the strategic finance department at Sahara Prime City, stated, "We plan to develop 102 townships in the first phase. The average project cost for each township is expected to be around 150 million dollars." When asked about the funding sources for each project, which would typically range from 100 to 300 acres, he indicated that the strategy involves sales, debt, and contributions from promoters. However, a funding gap of Rs 100 crore exists for each project.
Wadhwa remarked, "We will raise Rs 2,000 crore by the 2009-10 fiscal year through debt and private equity," while noting that discussions are already underway with banks, financial institutions, and private equity firms. The company is also considering selling stakes at both the company and individual project levels. Additionally, they are in conversations with global developers to explore joint venture opportunities for the establishment of these townships.
Regarding an initial public offering (IPO), Wadhwa mentioned that the company aims to unlock value when the market conditions become favorable. The Sahara Group had originally announced plans to develop townships in 217 cities back in 2004-05. Presently, they have launched nine townships, with construction actively progressing, and have plans to introduce 22 additional townships by mid-2009.
Notably, Sahara Prime City currently holds 20,000 acres of land, which includes a significant 10,600 acres in the Aamby Valley City, situated near Mumbai.