Es­sar’s Realty Arm May Re­pay En­tire 1,400-cr Debt in A Year

The Economic Times - - Economy & Companies -

So­bia Khan & Kailash Babar

Ben­galuru | Mum­bai: Equinox Realty, the real es­tate arm of the di­ver­si­fied Es­sar Group, plans to re­pay its en­tire .₹ 1,400-crore debt over the next one year, us­ing pro­ceeds from the sale of two projects, one each in Ben­galuru and Mum­bai.

But the group isn’t ex­it­ing real es­tate busi­ness, a top Es­sar ex­ec­u­tive told ET, dous­ing ru­mours stirred up by the re­cent deals to sell the prop­er­ties. Sudip Rungta, ex­ec­u­tive di­rec­tor, M&A, told ET that the com­pany will fo­cus on the realty mar­ket in metro cities.

In March, the com­pany sold its un­der-con­struc­tion lux­ury res­i­den­tial project, Wa­ter’s Edge, in Ben­galuru to de­vel­oper SNN Builders for .₹ 300 crore. The project com­prises con­struc­tion of res­i­den­tial space of 2 mil­lion sq ft and is es­ti­mated to gen­er­ate rev­enue of .₹ 1,200 crore.

In an­other trans­ac­tion in Fe­bru­ary, Es­sar en­tered into a pact to sell its 1.25-m sq ft com­mer­cial project, Equinox Busi­ness Park, near Mum­bai’s BKC to RMZ Corp for around .₹ 2,400 crore.

The deal for the ready and leased out prop­erty is the largest real es­tate trans­ac­tion so far this year. It is be­ing done in two tranches.

“We at Es­sar op­er­ate more like a fund; we build busi­nesses and de­pend­ing on the mar­ket con­di­tion, mon­e­tise them at a later stage,” Rungta said. “The sale of real es­tate as­sets is part of the com­pany’s strat­egy.The fo­cus is to delever­age bal­ance sheet across busi­nesses. We (realty busi­ness) will be debt-free in the next one year.”

He said the group is con­sol­i­dat­ing its real es­tate busi­ness and not ex­it­ing it.

“Given the en­tire in­vest­ment the­sis, we can never say we will exit real es­tate busi­ness. We will rather fo­cus on prop­erty mar­ket in key met­ros, and what shape this busi­ness takes will de­pend on growth op­por­tu­ni­ties,” he said.

Pro­ceeds from the Ben­galuru deal will flow in soon as the deal gets con­cluded by mid-May. The first in­stal­ment of money from the Mum­bai trans­ac­tion is ex­pected in the next two months.

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