L&T Realty exits from Chennai township projects, sells 51% stake in L&T South City Projects for Rs 190 crore
CHENNAI: L&T Realty Ltd, a wholly owned subsidiary unit of engineering giant of Larsen & Toubro Ltd, has sold its entire stake in L&T South City Projects to Pragnya Group, an investment firm associated with the project, for ₹190 crore. The company has executed a share purchase agreement for the sale of its 51 per cent stake in L&T South City Projects Private Limited to Pragnya Group, an investment firm.
L&T Realty holds a 51 per cent stake in L&T South City which is developing a 92-acre residential township at Siruseri, a suburb to the south of Chennai. Limited scalability of the business in the project for L&T Realty Ltd was the rationale behind the sale, said the company.
The share sale transaction was agreed today and is expected to be completed by March 30, L&T informed the BSE. Pragnya South Opportunity Fund and Pragnya Fund II of the Pragnya group are the purchasers. The group partners with reputed developers and has a presence in India, Sri Lanka and Africa.
The deal for the stake in L&T South City Projects Pvt. Ltd is worth Rs 190 crore ($28.7 million), Larsen said in a stock-exchange filing on Tuesday. L&T South City is developing a 92-acre residential township in Siruseri, Chennai. The transaction is likely to be completed by the end of March, Larsen said.
The statement said that Pragnya South Opportunity Fund and Pragnya Fund II, funds managed by the PE firm, bought the stake.
Focused on India and Sri Lanka, Pragnya Group invests across residential, commercial and industrial real estate in Tier I and II cities. According to its website, it prefers to comes at an early stage in the project development cycle and collaborate for land acquisition and approvals. However, it is open to reviewing investment opportunities across different stages of the project cycle.
Pragnya Group and L&T Realty have collaborated for many projects over the years. The PE firm has investments in L&T Tech Park and L&T Eden Garden. Its portfolio also includes residential project Hazel in Chennai, Habitat Crest in Bangalore and Genexx Towers and Exotica in West Bengal.
L&T Realty, which has a strong presence in southern and western Indian markets, has been selling its stakes across projects lately. VCCircle reported last year that Blackstone Group, one of the largest owners of commercial real estate in India, bought into a retail-cum-commercial project of L&T Realty in one of the biggest transactions of the year. The PE giant had also shown interest to acquire some of the ongoing projects of the developer in Hyderabad.
L&T also sold its retail property – Elante Mall – in Chandigarh to Carnival Group last year.