Godrej Properties Ltd

Banking on land

Price Band Rs. 490-530
Issue date : 9-11 Dec.
– Neutral

The company proposes to use the issue proceeds for acquisition of land development rights for new projects, construction of new projects, repayment of loans and to meet working capital requirements.

Godrej Properties Ltd (GPL), a subsidiary of the renowned Godrej Industries Ltd, is involved in developing residential, commercial, retail and information technology projects across the country. GPL’s total land reserve currently stands at 391 acres, translating into a saleable area of 50.2 million sq. ft. Around 50% of its saleable area is coming from a township project in Ahmedabad, which will be executed over the next 10 years. Currently, Godrej and Boyce Manufacturing Co. Ltd has leased 36.5 acres of land for a period of 99 years, commencing from April, to Godrej Industries, which, in turn, has given development rights to GPL. We believe that the IPO is fairly priced. However, investors can look at alternative, existing listed firms such as Anant Raj Industries Ltd, which have a debt-free balance sheet, land at prime locations and trading at significant discount to our one-year forward NAV.

—Angel Broking