Tata Capital Invests in Shriram Properties
The $100 billion diversified Tata Group has further extended to include Tata Capital, a private equity arm responsible for the first external real estate investment of the group. Tata Capital has invested $80 million (Rs 470 crore) in 15% stake and a board seat in Shriram Properties, the Bangalore-based real estate division of the Shriram Group.
The resultant promoter stake in privately held Shriram Properties stands at 42% after the Tata Capital investment. This money is likely to be invested by Shriram Ventures into other group companies, especially the ones listed as Shriram EPC and new businesses. Other investors of this Bangalore-based unit include Marquee global investors TPG, Starwood Capital, and Walton Street Capital.
Having no existing debts, more than Rs 400 crores worth of cash reserves, and the financial support from Tata, Shriram Properties is considered favourable for an IPO in the near future, according to the company’s Managing Director M Murali.
Padmanabh Sinha, Managing Partner from Tata Opportunities Fund feels that it is the uniqueness and might of Shriram Properties that attracted Tata to invest in this company. Tata appreciated the precision and professionalism shown by the Shriram management team, which was found to be lacking in other real estate companies.
United by the importance they have given to mid market housing, Tata and Shriram Properties have stated that the growth of the residential real estate market will emulate the increased urbanisation and changing demographics such that demand and supply of residential property will be two sides of the same coin.
Source: Business Insider
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