The Emami Group is merging three real estate companies under its fold — Zandu Realty, Emami Reality and Emami Infrastructure — in an attempt to draw synergies.
The Emami Group is merging three real estate companies under its fold — Zandu Realty, Emami Reality and Emami Infrastructure — in an attempt to draw synergies.
“Zandu (Zandu Realty Ltd), Emami Reality and Emami Infrastructure are being merged. Details would be revealed in 2-3 months,” said R S Agrawal, executive chairman.
“It involves valuations and getting approval from courts and all these things would start by then,” he said after the company’s annual general meeting on Saturday.
Zandu Realty is what has remained of Zandu Pharmaceutical Works Ltd after acquisition and transfer of its main businesses, making and selling brands like Zandu Balm and several other aurvedic formulations, to Emami Ltd.
Following this Zandu Pharmaceutical was renamed as Zandu Realty holding some assets including land in Central Mumbai, which has a prospect for being developed commercially.
Emami Infrastructure was formed out of transferring Emami’s stake in Zandu Realty, demerging its real estate ventures and also by transferring its investment in a wholly-owned subsidiary, Emami Realty Ltd.
Emami Infrastructure is a listed entity with a land bank of about 200 acre and projects like an IT Park at Rajarhat near Kolkata, 500 residential apartments on 4.46 acre at Kukatpally and 325 residential units on 5 acre at Prajaya, both in Andhra Pradesh.
The company, however, is asset light and most of its projects are through joint ventures including partners such as Anand Rathi Real Estate Fund.
“Nowadays trend is to reduce the number of companies as much as possible so that operational problems are the least. There are also benefits such as it helps fund raising. Otherwise we have to go for bank loans for each company,” Agarwal said.
Apart from the proposed merger of the realty arms, Emami is also consolidating and merging some of its diverse group companies.
“Emami Frank Ross (medicine retail chain) has been merged with Emami Chisel Art (art gallery), which, in turn, has been merged with Starmark (book store chain). There are various parameters being considered for merger, and increasing the size of the balance sheet is one of them,” Agarwal said.
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