Nandi Expressway attempts to capture market with 2,000 crore IPO
Bangalore: After being in continuous controversies, Nandi Economic Corridor has initiated plans to raise 
2,000 crore through an Initial Public Offer (IPO) that could value it at more than $1.5 billion. According to a few familiar sources, the board of directors would soon finalize on how much stake to sell to public and the authorization to organize the share sale may be give in the first quarter of 2011, which Enam Securities and SBI Capital Markets are bidding for, as reported by Sobia Khan from The Economic Times.
The company was mainly founded by BF Utilities wherein BN Kalyani, the chairman of the $2.4-billion Kalyani Group and Ashok Kheny hold a 77 percent stake. Anil Ambani has a 15 percent stake, Indus Fund and New India Insurance 6 percent and 2 percent, respectively. The IPO profits plan to partly finance the construction of a 99-km expressway between Bangalore and Mysore, three township projects and a 400-mw power project. In order to make significant profits in the near future, the company has intentions of selling the available land in plots instead of developing the whole parcel of land.
"The viability of the project depends on the development of real estate to a great extent," according to a report from rating agency CARE. The first phase of Bangalore- Mysore corridor alone requires the construction of 7,000 acres. The project consists of four components -- a 9.1-km stretch connecting Bangalore to the peripheral road, a 41-km peripheral road connecting Bangalore to Hosur, Tumkur road, a 111-km expressway between Bangaluru and Mysore and a 3-km elevated road near Bangaluru.
Out of the requirement, 55 km of peripheral road has been completed. Of the 9-km link road, 8.5 km is completed and out of the 12 km of expressway, 5 km has been built. In order to reduce the time spent in travelling between the two cities, NICE has invested 2,000 crore in the construction of the corridor which will reduce the travel time by half.
2,000 crore through an Initial Public Offer (IPO) that could value it at more than $1.5 billion. According to a few familiar sources, the board of directors would soon finalize on how much stake to sell to public and the authorization to organize the share sale may be give in the first quarter of 2011, which Enam Securities and SBI Capital Markets are bidding for, as reported by Sobia Khan from The Economic Times.
The company was mainly founded by BF Utilities wherein BN Kalyani, the chairman of the $2.4-billion Kalyani Group and Ashok Kheny hold a 77 percent stake. Anil Ambani has a 15 percent stake, Indus Fund and New India Insurance 6 percent and 2 percent, respectively. The IPO profits plan to partly finance the construction of a 99-km expressway between Bangalore and Mysore, three township projects and a 400-mw power project. In order to make significant profits in the near future, the company has intentions of selling the available land in plots instead of developing the whole parcel of land.
"The viability of the project depends on the development of real estate to a great extent," according to a report from rating agency CARE. The first phase of Bangalore- Mysore corridor alone requires the construction of 7,000 acres. The project consists of four components -- a 9.1-km stretch connecting Bangalore to the peripheral road, a 41-km peripheral road connecting Bangalore to Hosur, Tumkur road, a 111-km expressway between Bangaluru and Mysore and a 3-km elevated road near Bangaluru.
Out of the requirement, 55 km of peripheral road has been completed. Of the 9-km link road, 8.5 km is completed and out of the 12 km of expressway, 5 km has been built. In order to reduce the time spent in travelling between the two cities, NICE has invested 2,000 crore in the construction of the corridor which will reduce the travel time by half.