HCC unit Lavasa eyes $431m in share sale

Mumbai: Lavasa Corp., a unit of Indian developer Hindustan Construction Company (HCC) Ltd., plans to raise as much as Rs20 billion ($431 million, Dh1.6 billion) by selling shares.

Lavasa, which has built a namesake township near Mumbai, will sell a 10 per cent stake in an initial public offer and will file sale documents with the regulator "very soon", Ajit Gulabchand, chairman of Hindustan Construction, said yesterday.

"The present economic environment is appropriate to unlock value in Lavasa," Gulabchand told reporters in Mumbai. "Demand for equity assets is strong, since a lot of potential in India is yet to be realised."

Lavasa proposes to sell shares following real estate companies such as Embassy Property Developers Ltd., which plans to raise Rs24 billion in an IPO, according to a share sale document filed this month. Lodha Developers Ltd., Sahara Prime City Ltd. are also planning to raise money.

Hindustan Construction shares rose 4 per cent to Rs133.85 at close in Mumbai. The stock has declined 8.4 per cent this year.

Only one of the three developers that sold shares this year is trading above its initial share sale offer price as investors shun property stocks.

The Bombay Stock Exchange's Realty Index has dropped 12 per cent compared with a 2.3 per cent increase in the benchmark Sensex Index.

Profit at Lavasa rose 87 per cent to Rs490 million in the quarter ended June 30. Sales climbed 94 per cent to Rs1.81 billion, Hindustan Construction said in a statement to the Bombay Stock Exchange on Friday.