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Janapriya To Develop Two IT SEZs
Posted by Pradeep Sadanapalli | June 27, 2008 | 607 views
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Loading ...Hyderabad-based Janapriya Engineers Syndicate, a residential projects developer, is diversifying into commercial space development.
It plans to set up two SEZs for the IT sector in Hyderabad at an investment of over Rs 1,000 crore each. SEZs are virtual tax havens meant to promote exports.
The company will also look at floating special purpose vehicles (SPV) for these projects and offer stakes to private equity (PE) firms.
The company has 25 acres of land in Attapur and another 25 acre in Miyapur, which it plans to develop as SEZs. It expects to get approval for these projects in another five months. Discussions with PE players will start once the government approves these projects, said K Ravinder Reddy, chairman & managing director of Janapriya Engineers Syndicate.
“We will float separate SPVs as these projects require huge investment. The SPV route will help us raise funds. Our plan to is to divest about 30% of stake to PE funds, while the controlling stake will remain with us,” he said.
An SPV is a subsidiary company with a structure that makes its obligations secure even if the parent company goes bankrupt. Simply put, it is a separate legal entity created to handle a venture on behalf of a company. Many realty developers are opting for this route now as it is perceived to be safer, given the risks involved in the real estate business.
“With fuel prices going up, IT companies do not want to move away from the city. As land is a scare resource within the city, we expect to rope in major IT companies as clients for the SEZs,” he said.
Andhra Pradesh is already home to the largest number of SEZs in the country. There are around 71 SEZs coming up in the state, of which 40 are approved by the centre for the IT sector. The state expects to attract investment aggregating to Rs 35 billion and create 2.5 million jobs through these SEZs.
Janapriya is also setting up a residential project in Chennai at an investment of Rs 540 crore. “We have acquired 40 acres of land in the city and will develop 7.5 lakh square feet space. The approval for the project is expected in four months,” said Reddy.
The company plans to complete the project in over four years. The first phase of the project will be over in 18 months and will require an investment of Rs 130 crore.
With new projects in pipeline, the company expects its revenues to go up from Rs 140 crore in FY 08 to Rs 220 crore this fiscal.
SOURCES:
Economic Times
Topics: Real Estate |
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