In one of the largest private equity deals in the real estate sector this year, financial services major Credit Suisse has invested $100 million (about Rs 430 crore) in Hyderabad-based Indu Projects for a minority stake.
Indu Projects is a leading name in the construction and real estate sector in Andhra Pradesh in which, about two years ago, Citigroup's private equity arm had invested about $50 million.
Since the stock markets went into a tailspin at the beginning of the year with real estate companies among the worst hit deals in the sector have dried up. In this deal, Credit Suisse invested directly in the company, and not through a special purpose vehicle in one or more projects which is more common in this sector now, sources said.
Indu Projects, an eight-year-old company, is promoted by Shyam Reddy, who was earlier associated with IVRCL Projects, also a construction and real estate major. Indu Projects is currently associated with, among others, the construction of an IT park in Hyderabad, a real estate project in Pune and also with construction of a Tata Power project. The company also executes government contracts and is planning to foray into power sector in a big way.
Sources said this is among a series of investments made by Credit Suisse with the deal team comprised of industry veterans Hemang Raja, Gaurav Kumar, Nikhil Bhatia and Sameer Nair. Avendus was the investment bankers to the transaction. Real estate consultancy major Jones Lang LaSalle are the advisors to the company on its several real estate projects.
Industry players said post the recent debacle in the stock market, private equity/venture capital funds evaluating real estate companies for investments are looking at firms with good management, clear land bank, and strong execution and development capabilities. But there are very few companies that make the cut, a person associated with the Credit Suisse-Indu Projects deal said.
Source: Times of India