INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

GOLDMAN MAY PUT RS 1,000 CR IN DLF

 GOLDMAN Sachs is likely to ink a deal with real estate major DLF for investing close to Rs 1,000 crore in the company. According to sources, Goldman Sachs is bullish on investing in some of the company's ongoing projects, including one being developed in Delhi in a joint venture with Indiabulls. Earlier this year, Goldman Sachs had announced plans of investing around Rs 4,500 crore in various businesses in India, including, residential and commercial real estate and infrastructure projects.

   Sources confirming the move, were, however, not sure of the exact modalities that Goldman Sachs would follow, while investing in the real estate behemoth. “While talks with DLF are already on, the company may also initiate discussions with some other developers,” a source in Goldman Sachs said. The tricky question remains as to how this investment would be treated. The government has not allowed pre-IPO FDI in the real estate sector. Government officials maintain that FDI infusion before an IPO can only come in as portfolio investment subject to a 10% cap.

Goldman Sachs had an association with DLF, when it was a joint venture (JV) partner of Kotak. Kotak was a lead banker in DLF's proposed IPO. However, earlier this year, in March, the two companies broke a 10-year alliance, and Goldman Sachs had subsequently announced plans to set up its own business in the country.

   “We want to introduce all our businesses including asset management in the country over a period of time,” L Brooks Entwistle, CEO, Goldman Sachs India, had said while announcing plans for investing $ 1 billion in the country over the next couple of years.

   According to industry sources, the investment banking company is eyeing significant stakes in some extremely hot and booming real estate destinations such as the NCR, areas around Mumbai and near the under-construction Bangalore International Airport. It is also learnt to be bullish on areas close to some SEZs, which have already been announced.