Lodha IPO ‘Coming In 7-8 Months’

Lodha Developers, among the largest of India’s realtors in the western region, will be going ahead with its public equity offering to raise around Rs 2,500 crore. Confirming market speculation that the construction group was all set for its IPO, Abhishek Lodha, MD of Lodha Developers, in an exclusive interview with Businessworld, said the due diligence process for the public issue had been set in motion, and the company was looking to go to the market in “7-8 months time.”

The company’s earlier attempt to launch an IPO in 2010 had been called off. The realtor company, headed by an elected BJP MLA, Mangal Prabhat Lodha, has also recently been in the news with speculation that the two sons, Abhishek and Abhinandan, had fallen out and there had been a split in the family business.

Speaking on the issue, Abhishek Lodha confirmed that the group’s business had in fact been separated wherein Abhishek, the elder son, was now heading the entire gamut of real estate projects operated under ‘Lodha Developers’. Abhinandan, on the other hand, had been placed in charge of the family’s financial services business and now headed the non-banking finance company, Roselab Finance. “The company will shortly undergo a change of name to reflect the Lodha brand,” Abhishek Lodha told BW.

The elder brother went into some detail to explain there was no “ownership battle” nor was there a “split” in the family. “They are two separate businesses (real estate and finance), and we intend to develop each area separately,” he said, adding, “It is much like the division of the Bajaj Auto family division where ownership is common but responsibilities have been divided.” Abhishek however could not explain the rationale of Abhinandan heading a very nascent business operation, while the bulk of the lucrative real estate projects had been put in the charge of the elder brother.

The Lodhas, meanwhile, see a slow but definitive change in the realty market outlook with buying interest picking up. In FY 2015, the group had notched up Rs 7,800 crore in sales, while this year’s sales so far had brought in Rs 4,800 crore so far, which included Rs 1,500 crore of sales to non-resident Indians (NRIs). “We hope to surpass last year’s sales figures for FY2016,” Lodha said. The confidence, he said, also came from the opening up of the commercial/office space market, and the group was now focusing on ‘Grade A’ office space in a big way in Pune. “Private equity players like Blackstone are keen to enter the premium office space area,” Abhishek remarked, conceding that the group was looking to such tie-ups for scaling up operations.

Another focus area for the Lodhas has been London, where the company is developing two residential projects including one on Grosvenor Square. The company had bought the former Canadian high commission building in Mayfair for £306 million, and aims to develop residential housing ranging from mid-market to super-prime. Abhishek Lodha said his group was targeting generating around £1.5 billion from the 2 projects.

Among the major Lodha realty projects are the company’s World One towers, in what was once Srinivas Mills, the Pallava Township in the Kalyan Dombivili area, north of Mumbai, an upscale residential project in Wadala, Mumbai, branded as ‘New Cuffe Parade’ and a 4-tower development in ‘The Park’ – a 17-acre layout in what was formerly Mumbai Textile Mills. ‘The Park’ also includes a branded ‘Trump Tower’ but Abhishek Lodha, reacting to Donald Trump’s controversial statements about Muslim immigration, said: “We have no plans to change our branding.”