The Hindu Business Line : Peninsula Land plans major expansion

Expansion spree
Besides working on three major residential-cum-commercial projects in the city, the company is now broadening its portfolio - taking up more specialised projects, creating SEZs and constructing IT parks.
The group is also constructing `Peninsula Techno Park' at Bandra-Kurla Complex.
The company is also entering the SEZ business in Goa and Pune.

Mumbai , Aug. 7

Peninsula Land Ltd (PLL), formerly known as Morarjee Realties Ltd, is on a huge expansion phase. The listed company of the Rs 2,500-crore Ashok Piramal Group is on the lookout for large acreage projects all over India.

Besides working on three major residential-cum-commercial projects (two thirty-floored towers and a fifty-storeyed tower) in the city, the company is now broadening its portfolio - taking up more specialised projects, creating SEZs and constructing IT parks.

"We have been in real estate business for some time now. The plan now is to construct bigger and better. Currently, we are focusing only on large acreage projects," said Mr Rajeev Piramal, Executive Vice-Chairman, PLL.

The group is also constructing `Peninsula Techno Park' at Bandra-Kurla Complex.

PLL has acquired 72.6 per cent controlling stakes (for a consideration of about Rs 600 crore) in Dawn Mills Ltd (from the Ruias) through a combination of share purchase from previous promoters, the Ruias, and subsequently through an open offer. The land will be used for creating townships.

SEZ business

The company is also entering the SEZ business in Goa and Pune. The Goa Government has given about 250 acres for two biotech SEZs and a gem and jewellery SEZ.

"We received the land under the Biotech Policy of the Goan Government. PLL will develop infrastructure and invite companies to these SEZs. Companies have begun approaching us for space in our biotech parks," Mr Piramal told Business Line.

Total estimated investment (excluding land) of the group in biotech parks would be to the tune of Rs 600 crore. The group also has a villa project (1/2 million sq ft) in Goa.

PLL has also purchased a large chunk of land (from a private party) in Pune for constructing an IT park. The deal, however, has not yet been finalised.

Funding

Peninsula Land has also received SEBI's nod for floating Rs 1,000-crore real estate fund to buy properties across the country.

"Given the market conditions, the funds will only be raised in two or three phases. PLL (in its individual capacity) will also invest into the corpus fund. The money will be used to create landed properties across India," said Mr Piramal.

The company is on the look out for large pockets (100-300 acres) of land for taking up development projects. PLL is also keen on entering the real estate markets down South.

On Ajay Piramal Group foraying into real estate sector, Mr Piramal said, "That will not affect us in any manner. Our edge is in experience and expertise."'

Sale of `Crossroads'

The company had to sell `Crossroads', the mall, which the company owned in central Mumbai, for raising capital to create land bank for its future projects. Pantaloon Retail bought the mall for a price above Rs 250 crore.

"That was a tough call; but we had to sell `Crossroads'. PLL needed capital for its expansion programmes and furthermore the company had some debts to settle," said Mr Piramal.

The company logged a net profit of Rs 144.19 crore and declared a 25 per cent dividend after first full year of operations. The total income from operations for the 15 months period ended June 2006 stood at Rs 272 crore (Rs 163.9 crore). The company had made a loss worth Rs 9.52 crore in the previous year.

Income from operations for the quarter ending June 30, 2006 was Rs 108 crore and a net profit of Rs 59.1 crore.

The group, with Ms Urvi Piramal at the helm, has several business interests and has prominent presence in real estate (Peninsula Land Ltd), textiles (Morarjee Textiles), retail (Piramyd Retail Ltd), auto components (PMP Components), electronic components (G.P. Electronics) and machine tools (Miranda Tools).

Peninsula Land Ltd has undertaken development of about 55-lakh sq ft of retail, commercial and residential space. Shares of Peninsula traded at Rs 324.55 up by Rs 8.15 on the BSE on Friday.

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