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HDFC Asset Management Company has picked up 10% stake in Bangalore-headquartered real estate firm Nitesh Estates for Rs 100 crore, said banking sources privy to the development. The transaction comes at a time when Nitesh Estates is working towards an initial public offering in the last quarter of the current fiscal.

   Sources said the transaction at discounted price was a pre-IPO placement with HDFC arm planning to offload shares at the time of the issue or anytime in the next one year. The deal may have come at 15-20% discount. KPMG and J Sagar Associates were advisors to the transaction.

   The company’s executive director L S Vaidyanathan declined to comment.
   As reported earlier, the decade-old Nitesh Estates is expected file DRHP for Rs 550 crore IPO this monthend or in early November. Kotak, Enam, JM Financial and Morgan Stanley are advisors to the proposed IPO, sources added. The 32 year-old promoter Nitesh Shetty, a first generation entrepreneur, and private equity giant Och-Ziff will see their holdings drop to 57% and 9%, respectively after the public offering, which will involve fresh issue of shares. Mr Shetty holds 75% and Och-Ziff has 15% in the firm currently. Nitesh is among the 4-5 realty firms that are actively working towards a public issue in the next six months—others being Godrej Properties, Emaar MGF, Lodha Properties and Sahara India.

   Nitesh Estates has over 8 million sq ft of ongoing projects in Bangalore, Kochi, Chennai and in Goa. Besides 19 residential projects in the pipeline, the company is also developing India’s first Ritz Carlton property in Bangalore and two large mixed use projects in Chennai and in Kochi. While the IPO proceeds will be deployed into projects under development, the company is also in the midst of roping in private equity partners for some specific projects. Last year, HDFC Property Ventures, a real estate fund, had invested $20 million in the company’s upcoming mall project at Indiranagar in Bangalore.

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