Kolte-Patil Dvlprs sets IPO price band at Rs 125-145/sh

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Kolte-Patil Developers, a real estate developer in India, is entering the capital markets with an initial public offering (IPO) of 19,000,836 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The issue will open on November 19, 2007, and will close on November 22, 2007. The price band has been fixed between Rs 125 and Rs 145 per equity share.

The objects of the issue are to finance acquisition of development rights; finance the construction and development costs for some of the proposed projects; fund expenditure for general corporate purposes and achieve the benefits of listing on the Stock Exchange. 

The issue comprises a net issue of 18,812,709 equity shares to the public and a reservation of 188,127 equity shares for eligible employees. The issue will constitute 25.25% while the net issue will constitute 25% respectively of the post-Issue paid up capital of the company. The equity shares are proposed to be listed on the NSE and BSE.

Of the total equity float, not more than 50% of the net issue to the public will be available for allocation on a proportionate basis to qualified institutional buyers (QIBs), out of which 5% shall be available for allocation on a proportionate basis to mutual funds only. Further, not less than 15% of the net issue to the public will be available for allocation on a proportionate basis to non-institutional bidders and not less than 35% of the net issue to the public will be available for allocation on a proportionate basis to retail individual bidders.

Kolte-Patil Developers develops and constructs properties in Pune and also in Bangalore. As of September 30, 2007, it has developed and constructed 25 projects, including 22 in Pune and 3 in Bangalore, covering a total of approximately 4.01 million square feet of saleable area. These include 16 residential complexes, 4 commercial complexes, 3 complexes designed for mixed residential/commercial use, and 2 information technology parks. 

As of September 30, 2007, Kolte-Patil Developers is in the process of developing 28 projects, including 24 in Pune, and 4 in Bangalore. These projects are being developed with the aim of generating over 17.80 million square feet of saleable area on 21.61 million square feet of land area, and to include 5 IT parks, 11 commercial complexes, 10 residential complexes, 1 serviced apartment building and 1 integrated township. Also, as of September 30, 2007, it owned, held development rights for or had signed memoranda of understanding to acquire or develop 21.58 million square feet of saleable area on 32.88 million square feet of land area. It received the Government of Maharashtra's first prize for "Best IT Infrastructure in the State of Maharashtra " for its GigaSpace I.T. Park project in Viman Nagar, Pune.

For three of its larger projects, Kolte-Patil Developers has entered into joint venture agreements with funds managed by a real estate private equity fund in India, ICICI Venture Fund Management Company Ltd. (ICICI Venture). It has also entered into a joint venture agreement with K2 Property Limited (a subsidiary of Yatra Capital Limited, a Jersey-based real estate fund) for the development of some of its properties. Such relationships provide it with the ability to capitalise quickly on new and bigger opportunities, raise equity and debt and undertake large-scale development projects.

The company posted a total income (consolidated) of Rs 2, 524.43 million in fiscal 2007 and an adjusted profit after tax of Rs 835.61 million. For the 3 months ended June 30, 2007 , the Company posted a total income (consolidated) of Rs 889.65 million and an adjusted profit after tax of Rs 338.76 million..
 
The book running lead managers to the issue are DSP Merrill Lynch Limited and Edelweiss Capital Limited.