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Unitech firm raises £360m

Mumbai, Dec. 15: Unitech Corporate Parks Plc (UCP), which is associated with realty major Unitech, has raised £360 million (Rs 3,156 crore) through an initial public offer on the London Stock Exchange’s Alternative Investment Market (AIM).

AIM is an international market for small, fast-growing companies. With the IPO, the company now joins Hiranandani Constructions, K Raheja Corp and West Pioneer Properties, which have either accessed the exchange or intend to do so.

Incidentally, all of them are realty players and they have targeted the AIM as its listing rules are less stringent than that of other exchanges. Unitech is the country’s largest listed real estate company.

UCP, incorporated in the Isle of Man, today announced that it has placed 360 million ordinary shares of one pence each through the IPO and aims to invest in the Indian real estate sector. The shares were placed with investors at a price of 100 pence per share, taking the total issue proceeds to £360 million.

Deutsche Bank, which is a joint book-runner in the issue and the company's nominated adviser and broker, has been granted an over-allotment option to sell up to a further 54 million ordinary shares at the offer price, which could raise a further £54 million.

Commenting on the offer, UCP chairman Atul Kapur said, “The successful completion of the offer is a strong indication of investor appetite to gain exposure to the rapidly expanding real estate market in India and we are delighted to welcome a broad-base of international investors to the company.”

The entire IPO proceeds, excluding certain expenses, would be used to acquire majority stakes in six real-estate development projects and to partially fund construction costs, the company said.

These six projects include one information technology park and five potential IT special economic zone (SEZ) projects. In a submission earlier, Unitech said five of the seed portfolio assets are located in the national capital region and one in Calcutta.

Of these, five seed portfolio assets received in-principle approvals and two out of five have received the recommendation of the respective state governments for establishing SEZs and the sixth asset has certain approvals for establishing an IT Park. The seed portfolio assets were valued at an aggregate amount of Rs 4,137 crore by Jones Lang LaSalle Property Consultants (India) Private Limited, international property consultants.

The IT park, called InfoSpace in Calcutta, is a 48.37-acre site situated at New Town, Rajarhat. Unitech Hi-Tech Structures Ltd (UHTSL), which is a group company, is developing the site. UHTSL received an in-principle approval from the SEZ board of approvals for setting up the IT and ITeS SEZ early this year.

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