Akruti Nirman's IPO to raise up to Rs 360 cr

New Delhi, Jan 14 (UNI) Slum developer Akruti Nirman Ltd plans to raise up to Rs 360 crore through an initial public offering (IPO) of 67 lakh shares of Rs 10 each through 100 per cent book-building process.

The company has fixed the price band at Rs 475 to Rs 540 per share. The issue will open on January 15 and close on January 19.

The net proceeds of the IPO, which will dilute 10 per cent of the promoters' share, will be utilised to finance acquisition of land and development rights, construction and development costs and the repayment of loans.

''Rs 150 crore will be used to fund the cost of aquiring land or the rights over the land, Rs 125 will go for financing the costruction and development of the projects and Rs 25 crore for the repayment of loans,'' company's Chairman Hemant Shah told reporters here.

The balance will be utilised for meeting general corporate expenses.

Akruti Nirman till November 30, 2006 developed 10 residential and six commercial projects in Mumbai mainly on the land acquired under the Maharashtra Government's Slum Rehabilitation Scheme.

''Slum rehabilitation is our forte. Twenty-five per cent of the total slum development in Mumbai belongs to Akruti,'' Mr Hemant Shah said.

''Fifty-five per cent of our work pertains to slum development,'' Chief Finance Officer Rajendra Shah said.

The company has planned diversification of its business by taking up the construction of IT parks, bio-technology parks and shopping malls. ''Besides, we will evaluate the possibility of leveraging our slum rehabilitation expertise to the business into Rajasthan, Karnataka, Gujarat and Delhi,'' the Chairman said.

Rajasthan and Karnataka have recently commenced slum development schemes for areas known as ''economic weaker sections''.

Akruti Nirman is currently working on 31 projects, of which 15 are residential covering 5.1 million square feet (sq ft), 10 are commercial on 9.7 million sq ft and six are for construction of shopping malls over 1.7 million sq ft.

''The projects involve development of an IT park in Pune in joint venture with DLF and a bio-technology park in Baroda in association with Gujarat Government and a Kolkata-based company,'' said Mr Gaurang Shah of Enam Financial Consultations, which alongwith JP Morgan India is the lead manager to the issue.

The company earned a net profit of about Rs 63 crore for the fiscal 2006, 380 per cent higher than the profit of Rs 13 crore in the previous year.

Its clients include Tata Consultancy Services, 3i Infotech and BNP Paribas.

UNI