Kotak Realty sells Peepul Tree to Tata Realty for Rs525 cr

Deal between Kotak India Real Estate Fund I and Tata Realty Initiatives Fund 1 is the largest exit by a real estate fund 

Mumbai: Kotak India Real Estate Fund I has announced the sale of Peepul Tree Properties, a wholly-owned undertaking, to Tata Realty Initiatives Fund 1 for an enterprise value of Rs525 crore ($117 million).

Peepul Tree Properties owns an IT park in Goregaon, in suburban Mumbai, which is leased to marquee tenants such as Accenture, HP, BNP, Tata AIG, BOB Legal and General, Integron and Prana Studios.

On an initial equity investment of Rs95 crore, Kotak India Real Estate Fund I has received over Rs 400-crore from the exit including internal accruals, the company said in a statement, reports PTI.

The exit has scored many firsts. In addition to being the largest real estate exit in the Indian market by a fund, Peepul Tree Properties is the first office property to be divested by a property fund in the country and one of the first foreign direct investments in an income producing asset, the company stated.

Kotak India Real Estate Fund I is the inaugural Rs457 crore domestic fund ($100 million) of Kotak Realty Fund. With the sale, Kotak Realty Fund will also become the first property fund in India to return the entire corpus of the fund back to its investors. The Fund has other notable investments such as Lemon Tree Hotels, Pride Hotels, 3C Green Boulevard and Clover Golf community.  

Kotak Realty Fund director, V Hari Krishna, said, "This has been a highly successful investment for the Fund. It was a control investment, which we have been able to lease, operate and exit profitably. A $117 million exit of an office property in India demonstrates that the market is getting deeper and signals the return of institutional capital."

Kotak Realty Fund chief executive officer, S Sriniwasan, said, "Our investment in Peepul Tree Properties and subsequent exit is a classic example of our approach to real estate investing and fund management. By making these investment decisions, we have helped build quality assets in partnership with leading Indian developers and have created enduring value for our investors."

"We are actively pursuing exit opportunities in our first fund, even while we continue to deploy capital from our subsequent funds. We have so far contracted exits aggregating $177 million, underlining our credentials as one of India's leading property fund managers. We will continue to focus on scaling up the business further with new fund offerings."

Kotak Realty Fund, a division of Kotak Investment Advisors Ltd, was established in 2005 and is one of the country's first realty funds with an opportunistic investment strategy.

The core investment team includes S Sriniwasan and V Hari Krishna, the founding members, and Vikas Chimakurthy. Kotak Realty has aggregate funds under management/advisory of $700 million across three funds: Kotak India Real Estate Fund I, a Rs457 crore domestic fund; Kotak Alternate Opportunities India Fund, a Rs1,491 crore domestic fund; and Kotak India Realty Fund, an offshore fund of $265 million.

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Dr Reddy’s aims at $1-bn yearly revenue for 3 years

Dr Reddy’s Laboratories aims to earn revenue of $1 billion per year from branded generics for the next three years

Pharma major Dr Reddy's Laboratories aims to earn revenue of $1 billion per year from branded generics for the next three years, said K Anji Reddy, its founder-chairman.

The second-largest Indian drug maker sold generics to the tune of $600 million globally in the nine months of this financial year ended 31 December 2010.

"While analysing our global generics segment recently, I have told our people that we will be able to sell a billion dollar worth of generics in next three years," Reddy said while speaking at the inaugural session of a national conference on 'Regulatory challenges - global pharmaceutical market'. The company's flagship brand, Omez, alone brings in Rs700 crore revenues to the company, he said.

The company had filed 141 abbreviated new drug applications (ANDAs) to the US FDA till December 2010. The company is awaiting approval for 62 ANDAs. Of these, 35 were filed with Para IV; and 13 are first-to-file products. Analysts say the key trigger for the company for future growth will be the opportunity arising due to off-patent of some of the blockbuster drugs worth $80 to $100 billion in the next five years.

"Some of the drugs like Pfizer's Lipitor will be off patented in the next three to four years. Dr Reddy's as a generic drug maker is well positioned to take the opportunities. Though the market size in terms of value comes down after the patent expiry, generic players will have sizable opportunity," Satish Kanteti of Zen Securities said. It also expects a big boost to generic sales from the proposed launch of generic Allegra-D in the US market and the first shipment of drugs under the GSK tie-up.

On Monday, Dr Reddy's ended 2.57% up at Rs1,609.50 on the Bombay Stock Exchange, while the benchmark Sensex declined 1.43% to 18,222.67.

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Shipping Corporation to acquire 110 vessels by 2020

Shipping Corporation of India plans to acquire 110 vessels of 5.21 million gross tonnage at an estimated cost of Rs27,668 crore in next 10 years

Shipping Corporation of India Ltd (SCI) plans to acquire 110 vessels of 5.21 million gross tonnage (GT) at an estimated cost of Rs27,668 crore in next 10 years, Parliament was informed today.

Among these vessels, the Shipping Corporation is likely to place orders for 26 vessels by 2011-12, shipping minister GK Vasan said in a written reply to Lok Sabha.

He added that the acquisition of the vessels would take SCI's total tonnage to about 7.21 million GT by 2020.

Gross tonnage is a unitless index related to a ship's overall internal volume and is calculated based on the moulded volume of all enclosed spaces of the ship.

The shipping minister further said that SCI has placed orders for 36 vessels so far against the target of acquiring 62 vessels in 11th Five Year Plan, which includes acquisition of one resale vessel.

On Monday, SCI ended 1.27% down at Rs104.60 on the Bombay Stock Exchange, while the benchmark Sensex declined 1.43% to 18,222.67.

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