Emaar MGF withdraws IPO

Emaar MGF has withdrawn its IPO due to poor response. The company today said the application money would be refunded in 10-15 days. Emaar MGF would now look at private placement and private equity deals at the special purpose vehicle (SPV) level. The IPO, which was initially expected to raise over Rs 7,000 crore in a price band of Rs 610-690 per share, was extended and the offer price cut twice to Rs 540-630 per share initially and finally to Rs 530-540 per share. Wockhardt Hospitals had withdrawn its IPO yesterday due to poor response. Following is the release issued by Emaar MGF today: Emaar MGF Land Postpones IPO

* To consider IPO at an appropriate time Emaar MGF Land Limited (Emaar MGF or the Company), a joint venture between one of the world’s leading real estate companies, Emaar Properties PJSC of Dubai, and MGF Development Limited of India, has withdrawn and postponed its Initial public issue to an appropriate time. The company decided to take this step as a result of the prevailing adverse market sentiments, fuelled by renewed indications of a US recession and global meltdown. Emaar MGF has decided to postpone the issue despite receiving applications worth Rs 5,779.36 crore in light of discouraging market dynamics. This decision has been taken despite the fact that the QIB and HNI portions were fully subscribed and the book was already filled to almost 85%. The retail portion had over 225000 applicants demonstrating significant appetite and demand for the issue. Given the prevailing sentiments in the capital markets it was unclear how well the stock would trade post listing; it has been considered wiser to revisit the markets only when the demand and sentiment is stable and better providing greater value to the investor. Emaar MGF remains committed to executing its projects in hand and is well funded to ensure that this delayed IPO will not hamper its growth plans. The company expects to return to the market at a later date when sentiment and liquidity conditions are better. Emaar MGF Land Limited is one of the leading real estate developers in the country with a strong parentage and a diverse land bank spread across 26 cities across India. The company is committed to its mission of developing and delivering unique integrated lifestyle and work place environments and planned developments. The primary business is the development of properties in the residential, commercial, retail and hospitality sectors. In addition, it has also identified healthcare, education and infrastructure as business lines for future growth. Its operations span across various aspects of real estate development, such as land identification and acquisition, project planning, designing, marketing and execution. The Global Co-ordinators and Book Running Lead Managers (“GCBRLMs”) to the Issue are Enam Securities Private Limited and DSP Merrill Lynch Limited. The Book Running Lead Managers (“BRLMs”) are Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited.

Emaar MGF to invest Rs15,000cr in hospitality

Realty firm Emaar MGF Land, currently in the process of raising up to Rs 6,457 crore through an IPO, is planning an investment of Rs 15,000 crore for its pan-India foray in the hospitality segment.

Emaar MGF Land, a joint venture between Emaar Properties PJSC of Dubai and domestic player MGF Development, intends to develop hotels across the value chain, covering the luxury, up-market, mid-market and budget segments, sources said.

Emaar MGF is planning to add about 26,000 keys over the next seven years with hospitality properties in multiple cities, sources added.

The current projects under development in the business and luxury categories are located in Delhi, Kolkata, Amritsar and Dehradun to be completed in fiscal 2009-2010.

These projects would add about 1,100 rooms over the next three years.

For the current project roll out, Emaar MGF Land has entered into an operating agreement and a memorandum of understanding with global hospitality giant Marriott Group to develop properties in Kolkata and Amritsar. The JW Marriot is one of the most luxurious & elegant brands of the Marriot Group.

Further, the company also has a management agreement with Intercontinental Hotel Group to develop hotels in Kolkata and Dehradun.

Emaar MGF IPO on track, to open on Feb 1

The initial public offering (IPO) of real estate developer Emaar MGF will open on February 1.

Asked whether the company is considering a delay in launching its IPO or lowering the price band due to volatility in the stock markets, Shravan Gupta, executive vice chairman and managing director, Emaar MGF Land, said: "Based on the response we have got from the road show and advice from merchant bankers, we believe this is a reasonably good time to go for an IPO."

The company is offering 102.6 million shares, equivalent to 10.4% of its fully diluted post-issue equity share capital, in a price band of Rs 610-690 per share. The issue is expected to mop up between Rs 6,258-7,079 crore.

Gupta said that post-issue, Dubai-based Emaar’s stake in the company will stand at 39% - down from 42%. Delhi-based MGF’s stake will stand at 48% as against the current holding of 53%.

The company is also planning to launch a real estate investment trust (REIT) in Singapore. "We should be in a position to do our first real estate investment trust within the next 18-24 months," Gupta said.

REITs are essentially entities that purchase, own and manage real estate properties. Indian real estate firms like DLF and Unitech are also planning to launch such trusts in Singapore.

Sources said Emaar MGF is planning to spin off its property developments to the REIT even as it embarks on a programme to make it one of the biggest real estate developers in the country.