Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oberoi Realty (OBER) has purchased 50% stake in I‐Ven Realty from ICICI
Ventures holding a 4 acre land parcel in Worli (Mumbai). Deal value of
~INR 3 bn (as per media reports) is marginally value accretive for OBER at
INR 1.44 bn (INR 5/share) assuming 2.67x FSI (including public parking FSI)
and NAV neutral assuming normal FSI of 1.33x in the island city. We
believe the deal demonstrates the company’s prudent cash utilisation
policy. Maintain ‘BUY’ with a target price of INR 278/share.
Event: Stake purchase in I‐Ven Realty marginally value accretive
As per media reports, the indicative deal value for OBER’s stake purchase from I‐Ven
Realty is ~INR 3 bn. As per the company, the plot size is ~4 acres and is eligible for FSI of
2.67x (assuming public parking FSI of 4x on a portion of the property). As per our
estimates, the plot will have a potential saleable area of 0.73 msf (with parking FSI) and
our key assumptions are an average sale value of ~INR 36,000/sf and construction costs
of INR 5,000/sf for free sale and INR 1,500/sf for public parking with project lifecycle of
five years.
As per revised public parking norms for Mumbai, ~40% profits from incentive FSI will
also have to be handed over to BMC. Factoring in all these assumptions, we estimate
marginal value accretion for OBER at INR 1.44 bn (INR 5/share) assuming parking FSI
and NAV neutral assuming normal 1.33x FSI.
Impact: Minimal impact on valuations; maintain ‘BUY’
We believe the deal is NAV neutral even after assuming normal FSI and an elongated
project cycle with limited pricing upside. We believe the deal demonstrates OBER’s
prudent cash utilisation and we remain positive on the stock given the net cash of ~INR
13 bn (post the I‐Ven deal) in its kitty. We currently have a ‘BUY/Sector Outperformer’
recommendation/rating on the stock with FY12E NAV of INR 278/share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oberoi Realty (OBER) has purchased 50% stake in I‐Ven Realty from ICICI
Ventures holding a 4 acre land parcel in Worli (Mumbai). Deal value of
~INR 3 bn (as per media reports) is marginally value accretive for OBER at
INR 1.44 bn (INR 5/share) assuming 2.67x FSI (including public parking FSI)
and NAV neutral assuming normal FSI of 1.33x in the island city. We
believe the deal demonstrates the company’s prudent cash utilisation
policy. Maintain ‘BUY’ with a target price of INR 278/share.
Event: Stake purchase in I‐Ven Realty marginally value accretive
As per media reports, the indicative deal value for OBER’s stake purchase from I‐Ven
Realty is ~INR 3 bn. As per the company, the plot size is ~4 acres and is eligible for FSI of
2.67x (assuming public parking FSI of 4x on a portion of the property). As per our
estimates, the plot will have a potential saleable area of 0.73 msf (with parking FSI) and
our key assumptions are an average sale value of ~INR 36,000/sf and construction costs
of INR 5,000/sf for free sale and INR 1,500/sf for public parking with project lifecycle of
five years.
As per revised public parking norms for Mumbai, ~40% profits from incentive FSI will
also have to be handed over to BMC. Factoring in all these assumptions, we estimate
marginal value accretion for OBER at INR 1.44 bn (INR 5/share) assuming parking FSI
and NAV neutral assuming normal 1.33x FSI.
Impact: Minimal impact on valuations; maintain ‘BUY’
We believe the deal is NAV neutral even after assuming normal FSI and an elongated
project cycle with limited pricing upside. We believe the deal demonstrates OBER’s
prudent cash utilisation and we remain positive on the stock given the net cash of ~INR
13 bn (post the I‐Ven deal) in its kitty. We currently have a ‘BUY/Sector Outperformer’
recommendation/rating on the stock with FY12E NAV of INR 278/share.
No comments:
Post a Comment