ganesh housing: Ganesh Housing buys out Monsoon Capital’s stake in subsidiary for Rs 321 cr

Realty developer Ganesh Housing Corporation Ltd (GHCL) has bought out 31% stake in its subsidiary, Gatil Properties, from the US-based fund Monsoon Capital for over Rs 321 crore. With this transaction, Gatil Properties has become a wholly-owned entity of the listed company.

The Ahmedabad-based company has acquired the entire holding of the alternative asset manager focused on India from its Mauritius arm Monsoon India Infrastructure Direct II Ltd.

Monsoon had invested around Rs 110 crore as equity capital in Gatil Properties over a period of two-three years between 2009 to 2012 for the acquisition and development of land for its proposed township project in Ahmedabad.

The company has completed the process of land acquisition and has also secured necessary permissions for the development. It is expected to start construction of the township in the middle of this year and will be developing the same across four-five phases.

With this stake sale, the US-based fund has secured an exit translating returns of around three times.

“The funds were invested in stages between 2009 and 2012 and we have made around 3-times returns from this investment. This investment has provided us superior and robust return and has been rewarding for both of us. The project has good development and revenue potential and will turn out to be one of the prime projects in Ahmedabad,” Girish Kulkarni of Suyash Advisors that advises and represents Monsoon Capital in India, told ET.

The land parcel of the residential township with 95% development proposed to be villas is on the proposed 90-meter ring road coming up in and around Ahmedabad and will see construction of a total of over 4,000 villas to here.The launch of the township along with its villa developments is expected soon and once commenced, it is expected to provide Ganesh Housing a definitive stream of cash flows and profits of over Rs 5,000 crore over the next 5 to 6 years.

This is the second such large development undertaken by the company apart from its ongoing development Information Technology Special Economic Zone (IT SEZ) Million Minds Tech City in Ahmedabad with Tishman Speyer as the development manager.

The developer is executing its first IT SEZ in Ahmedabad spread over 64 acres located at a key location behind Nirma University. This project is expected to be launched in a phased manner and will comprise of both commercial, retail, and residential developments.

This partnership will enable Ganesh Housing and Tishman Speyer to collaborate for the IT SEZ development, property, and lease management in phased manner.

On the SEZ processing zone, the company will lease out the developed area along with Tishman Speyer and for the non-processing zone, which will be residential development, the company will work on an outright sale model.

The SEZ has a potential development scale of 14.7 million sq ft including processing and non-processing area. The first phase of commercial development of around 1.3 million sq feet will be developed initially for which the work has already started and is expected to be completed by 2025-26.

The company is planning to financially support both the projects–the township and IT SEZ–through internal accruals.

The company has recently reported its best-ever performance on all parameters including revenue, profit, cash flows and debt reduction. It has recorded 61% increase in revenue for 2022-23 at Rs 621 crores and 45% rise in net profit at Rs 102 crore.

During the year, Ganesh Housing registered net cash flow of Rs 310 crore as against negative Rs 4.8 crore in the previous year. The company has turned into a zero-debt entity with Rs 325 crore cash surplus as against peak debt of Rs 650 crore in 2018-19.