INDIA BUSINESS WORLD - JANUARY 16^th - JANUARY 31^st - 2008

CITI, AIG TO BUY 16% IN AKRUTI FOR 1,500 CR

Leading foreign funds Citi Venture Capital and AIG are picking up a 16% stake in Mumbai-based developer Akruti City (formerly Akruti Nirman) for about Rs 1,500 crore through the preferential allotment route.

Akruti City will place up to 10.7 million equity shares of face value Rs 10 each, which translates into 16% of the company's pre-issue share capital.

Akruti MD Vimal Shah confirmed the development. "We have raised the funds for expansion activities," he said. Akruti City is developing three large commercial projects in Andheri (2 lakh sq ft), Kanjurmarg (2.5 lakh sq ft) and Bandra-Kurla Complex (1 lakh sq ft).

Akruti officials said they have launched another project in Andheri MIDC that will develop nearly 6.2 lakh sq feet, of which 5,000-50,000 sq feet will be for commercial use. This will cater to the growing demand for commercial space in the western suburbs, they said.

Akruti has also signed an MoU with the Gujarat government to set up a 708-acre Bio-IT park in Savli, Vadodara. The government will hold 11% in the project, Akruti 66% and the balance 23% will be with the Chatterjee Group. It has begun talks with companies to set up facilities at the park. It has also formed a consortium with Dubai World and is bidding for the Dharavi re-development project. Indian realty firms have been attracting many foreign funds. A group of PE and financial investors led by Deutsche Bank invested $425 million in the Lodha Group last September.