Unitech Infra aims to go public in a year’s time

Unitech Infra, the demerged entity of the country’s second largest real estate developer is aiming to get listed on the National Stock Exchange and Bombay Stock Exchange within a year, banking on its high order book and low leverage.

The infrastructure arm would have an order book of about Rs 2,700 crore, its services division manages over 10 million square feet of commercial and residential space and over 1,000 acres of townships.

Unitech Infra’s portfolio includes 11 hotels comprising about 2,100 rooms.

The entity also includes three amusement parks, one each in Delhi, Noida and Chandigarh.

The company would pursue build-operate-transfer (BOT) opportunities in the highways and the power transmission sectors. It intends to generate and distribute captive power within the existing and future developments of its parent firm.

The company has valued itself at about Rs 5,000 crore based upon assets it owns and has a debt of Rs 350 crore, giving it a low level of leverage. On April 14, DNA Money reported that the non-core assets Unitech could be valued at Rs 5,000 crore.

For the nine months end-ed December 2009, sales of this business were Rs 327 crore and net profit was at
Rs 57 crore.

On Tuesday, Unitech agreed to the swap ratio of 1:1 for the de-merger of Unitech Infra. Unitech Ltd would keep 35% holding in Unitech Infra, while the rest would go to shareholders.

The demerger is aimed at increasing the focus on the company’s infrastructure businesses and to provide significant financing flexibility for the infrastructure projects in terms of access to various pools of funds and availability of longer term and cheaper financing as compared to real estate projects.

“Infrastructure development has been at the heart of our core strengths over the years and this step will provide us the opportunity to capture the significant growth opportunity in the sector,” Unitech chairman Ramesh Chandra said.