GandhiCity in Hindustan Times

NEW DELHI, India, Aug 1 -- 'Gandhi City', pegged as the first private Research and Development (R&D) park in India covering 1,000 acres to be built with an investment of $ 600 million, aims to make India the hub of pharmaceutical, aviation and Information Technology of R&D.
The first-of-its kind R&D park at Ramanagaram near, Bangalore plans to house business incubators, university research centers and integrated residential complexes. Along with the R&D corporate park Gandhi City aims to create an ideal research environment where researchers, companies and educators can co-exist.Speaking to Hindustan Times, Giri Devanur, one of the six promoters and Chairman of …

GandhiCity in Economic Times -4

Lehman to pump in $300m in R&D SEZ

NEW DELHI: US-based investment bank and global financial services giant Lehman Brothers is close to making its first major investment in India. The fund is looking to invest nearly $ 80 million in a Bangalore-based 404 hectare research and development SEZ Gandhi City. ILFS Investment Managers, the private equity arm of IL&FS, is also looking to co-invest $20 million in the SEZ along with Lehman Brothers.
Sources say that $80 million may be only the first phase of Lehman's investment. Sources say Lehman Brothers may eventually invest up to $300 million in the SEZ, in two tranches. It is not yet known when the remaining $220 million will be invested.

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Gandhi City will be the fund's first major investment in India. Sources in the industry say the two parties are close to signing the term sheet. "Lehman is putting money through an SPV and both sides are looking to sign the term sheet in the next 30-40 days," a source close to the development said.
An e-mail sent to Sundaram Rajagopal, senior VP, Lehman Brothers and head of India investments, did not elicit a response. Shahzaad Dalal, VC & MD, IIML declined to comment on the issue. Gandhi City is promoted by a team of entrepreneurs with considerable IT industry experience including Giri Devanur, who founded Ivega Corporation, ex-Infoscian Manohara Nagaraja, Arjun Valluri—CEO of Intelligroup.
Sunil Khairnar, Sunil Khairnar, Shiv Dayal, Bhaskar. G, Sanjeev Rao and Madhura Nath are also part of the management team of the SEZ. The proposed SEZ does not figure among the 63 notified by the central government or the 171 SEZs which have been formally approved and are likely to be notified in the next few weeks.
It has, however, received an in-principle approval from the board of approvals, which clears SEZ applications, according to the commerce ministry's website. SEZs with in-principle approval, of which are 162, are further back in the queue. Since the investments will be made through the special purpose vehicle route, Lehman's exact stake is not known. Sources in the industry say, the investment baking outfit will acquire a majority stake in the SEZ.
Lehman Brothers is among the few US-based financial services majors which does not yet have a major presence in India. On the other hand, its competitors- Morgan Stanley, Goldman Sachs and Merrill Lynch have built a significant India portfolio. Lehman recently launched its investment banking operations in India.
Sources in the industry say Lehman Brothers is looking to make significant investments in India and is also learnt to be evaluating deals in the real estate sector. For the year ended November 30, 2006, the New York-head quartered 167-year old financial powerhouse posted net revenues of $ 17.583 billion and total assets worth $ 503.545 billion.
In Asia, the fund has significant investments in Japan, which is also its regional headquarters. Gandhi City, which hopes to provide employment to nearly 10,000 people, will act as an incubator for new ventures apart from attracting big ticket investors looking to locate R&D facilities.

http://articles.economictimes.indiatimes.com/2007-04-24/news/28405575_1_r-d-sez-investment-banking-operations-approval

giri_devanur

http://www.indianmba.com/Faculty_Column/FC1223/fc1223.html


Effect on Realty/Infra Projects

Now this is going to be the most troubled. Lehman and Merrill have invested through FDIs in many projects in India, in realty and infrastructure. Those projects which have received the full amount earmarked for the project are safe. But what about those, who are yet to get the promised funds? Surely their projects lay in a lurch today. Unitech has also gone on record stating that it has received Rs.740 crore and has closed the deal with Lehman Brothers. DLF Assets raised US$200 million in 2007 as equity from Lehman Brothers, the company says that the money has been received but equity is yet to be transferred. In HDIL, Lehman, through its Hong Kong subsidiary, had signed a written agreement to float a SPV for developing a project in Dharavi. That lies in uncertainty now.

Lehman had also invested $80 million in Bangalore-based SEZ Gandhi City, Backed by Giri Devanur and was likely to hike its share to $300 million. Ashok Piramal's Peninsula Land has inked a JV with Lehman, which will have a stake of 75% is to bring in Rs.5 billion, to invest in various realty projects of Peninsula. What happens to that now?

Lehman has a 28.41% stake in KSK Energy. The above shares are locked in for a period of one year from July 05, 2008 (the date of IPO allotment) and cannot be sold in the stock market till the expiry of the said period. But does this rule hold true when Lehman goes bankrupt?

GandhiCity in Economic Times -3

Lehman fall may deepen realtors' credit woes

Sanjeev Choudhary, ET Bureau, Sep 16, 2008, 01.43am IST

More PicturesNEW DELHI/MUMBAI: Lehman Brothers' bankruptcy is likely to cost Indian real estate dear. It may impact the financial major's existing investments worth $500 mn in realty firms, including DLF and Unitech, besides drying up another $500-mn worth of potential investment which was expected to flow into Unitech's Mumbai projects.
The news of Lehman's collapse brought the BSE realty index down by 7.65% on Monday, while the benchmark Sensex declined 3.35%. Both DLF and Unitech fell 7.5%.

Lehman's fall signals a deepening of credit crisis for Indian developers, who have lately been battling falling sales, rising cost of construction and tightening credit. It is expected that the US-based firm is likely to go for a fire sale of its assets.
The financial services major was very bullish on India and was among the active investors in Indian real estate. Early this year, it had leased out an office space in Mumbai paying Rs 1 crore per month as rental.
This would divert a part of fresh funds seeking to invest in Indian realty. This is because global fund houses have country-allocations. And as they buyout Lehman's stake in some of the Indian assets, they will end up diverting some of the fresh funds-in-hand to existing assets rather than investing in new projects.
"Lehman's departure will impact future cash flows of real estate companies. In a market situation like today's, it will be all the more difficult for the firms to raise funds," says Karvy Stock Broking vice-president Ambareesh Baliga.
Lehman invested $200 mn in DLF promoter group company DLF Assets last year and bought 50% stake in Unitech's Mumbai project for $175 mn a few months ago. It had also invested $80 mn in Bangalore-based SEZ Gandhi City, promoted by Giri Devanur and was likely to hike its share to $300 mn.
Lehman's other investments include a 40% stake in an IT park project of Peninsula Land in Hyderabad for an initial investment of Rs 50 crore. It had also teamed up with Mumbai-based developer HDIL to bid for the redevelopment of Asia's largest slum Dharavi.
Wherever the developers had received fund, they are safe. But where the funds are yet to come, the developers could get stuck. Some analysts say a distress sale by Lehman will impact the valuation of existing projects.
DLF CFO Ramesh Sanka had earlier told ET that Lehman's sale of investments in DAL would not impact DAL's valuation. Unitech MD Sanjay Chandra said that his company had already received funds. So, the company won't get impacted by Lehman's bankruptcy.
Some industry executives say that FDI norms of a three-year lock-in period may prevent Lehman from making an immediate sale. But analysts argue that the lock-in period in case of bankruptcy may not hold

GandhiCity in Economic Times -2

Bangalore to host R&D SEZ

NEW DELHI: After manufacturing, services and trading, it's now the turn of research and development (R&D) to get onto the special economic zone (SEZ) bandwagon.
A group of information technology (IT) and private equity (PE) players have sought permission from the government for setting up a hi-tech R&D city near Bangalore under the SEZ scheme.

Christened Gandhi City, the first R&D SEZ will be spread across 1,000 acre and the initial investment is expected to be around Rs 700 crore. The application for Gandhi SEZ is scheduled to be considered by the Board of Approvals — the nodal authority for SEZs — next week.
This is the first such project to seek clearance under the SEZ scheme. The project is now being considered as a service sector SEZ.
The project is promoted by a number of investors, including Giri Devanur, founder of the Ivega Corporation which was merged into the TCG Group in '04.
Arjun Valluri, who was the chief of Intelligroup, will be a key partner in the special purpose vehicle which has been set up to promote Gandhi City, he said. He said that more investors would join the project once it moved into the consequent stages.

GandhiCity in Economic Times

B'lore knowledge SEZ to raise $25 mn

Boby Kurian

BANGALORE: The 1,000-acre knowledge SEZ near Bangalore, Gandhi City for Advanced R&D, is in early talks with global infrastructure funds like the Singapore-based Jurong and Macquarie to raise $25 million by divesting 5 to 10% stake.
Sources said the project was carrying a valuation of $500 million with Avendus holding the mandate for raising funds. The project floated by a group of technocrats led by Ivega founder Giri Devanur is expected to spend $150 million in the first phase over the next three years.

The promoters are limiting the equity fund raising to $25 million as they are likely to go in for debt financing of $100 million, and would bring the remaining part of the cash for the first phase as seed capital on their own or through associates.
"The idea is not to offload equity at the early stage, and wait for the project to stabilize," sources said.
However, sources declined to divulge names of the funds with whom discussions were on. "'We are talking to most of the infrastructure funds from overseas and these are in early stage," they added.
The project is expected to close the equity deal only after the State clears the decks for land acquisition at Ramnagaram, which is about an hour's drive from Bangalore.
While Gandhi City has received the Centre's clearance, the state government deferred the decision to grant it regular clearance for want of certain details. According to sources, the project will come up for clearance at the next meeting slated for after a month.
Gandhi City is seen as a project that seeks to leverage Karnataka's quality manpower to emerge as a R&D hub for global players. The R&D SEZ proposes to rope in leading pharmaceutical, automotive, aviation and technology giants to put up their research and development units.
An incubator is also likely to be provided for scientists who lack financial backing or infrastructure for research in their specific areas. While Karnataka is witnessing a host of IT/ITeS projects, this is the first such project to seek clearance under the SEZ scheme.