The Hindu Business Line : Talk of PE funds picking up stake lifts Lok Housing

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Talk of PE funds picking up stake lifts Lok Housing

The market tremor in the last two days could hardly affect Lok Housing & Constructions. According to market sources, a few private equity funds are in the process of picking up 10 per cent stake at a substantial premium to the current market price. Though the official response was not forthcoming, a company official mentioned that shareholders’ approval for placements to institutional investors had already been obtained. The sources in the private equity circles said that the proposed 10 per cent pie has been valued at around Rs 500 crore, which, in other words, placed the enterprise valuation of the company at Rs 5,000 crore. Its current market capitalisation is around Rs 400 crore and its traded P/E is less than three, much below the sector average. One of the oldest realty company in the country, Lok Housing has land bank spread across Mumbai and its suburbs at Khar, Bandra, Kalyan, Andheri, Mulund, Virar and Turbhe.

Raising funds

In the last one year, the company has raised funds through conversion of warrants — privately placed earlier to non-promoter investors. Market sources said the company is scheduled to settle a loan of Rs 25 crore with a bank on Friday. The stock on Thursday closed at Rs 201.50 after touching a high of Rs 229.35 on the BSE. It has moved up over 41.5 per cent in the last one week. Some 19.45 lakh shares changed hands on Thursday.

Jayanta Mallick