GPL eyes IPO by end-Dec; strong focus on affordable housing

Godrej group company, Godrej Properties Limited (GPL), plans to hit the market with its initial public offering (IPO) by end-December, a top company official said.

"We plan to come out with our IPO by the end of this calender year. We have filed our draft red herring prospectus with Sebi for the purpose. Subject to regulatory clearances and prevailing market conditions, our IPO should hit the market by end-December," Godrej Group chairman, Adi Godrej, told PTI here.

The company proposes to issue fresh capital to the tune of around 13% of its present capital.

The proceeds of the issue will be used to fuel Godrej Properties' expansion, he said, adding that given the huge future potential of residential realty, the company would be needing more capital going forward.

"This is the first capital-raising – we will need to raise more resources in the future," he said. Going forward, capital could be raised through either an FPO, QIP, private equity or other routes, he said.

The company's thrust would be on affordable housing which "will be our main growth-driver", Godrej said, adding that in the future the revenue-mix of the company would be 80% from residential housing (primarily affordable) and the balance from commercial realty.

"Affordable housing offers an immense potential and will be one of the key drivers of the real estate segment in the coming years. People have more appetite for affordable housing within the range Rs5-30 lakh," Godrej said.

The company recently announced an affordable housing (upper-end) project in Kolkata while another in Ahmedabad will be open for bookings this month.

On commercial realty, Godrej said that it was subdued presently and much depended on the IT sector doing well for growth in this segment to perk up.

However, Godrej Properties would be opening one commercial project in Chandigarh soon while one in Mumbai (Chembur-Eastern Express Highway) has witnessed an 80% booking, he said.

GPL clocked a 20% growth in its consolidated net profit in FY 09 at Rs75 crore as against Rs62 crore in FY 08 while consolidated revenue rose 10% to Rs250 crore in FY 09 as against Rs225 crore in FY 08.