Emmar MGF is a joint venture company between the world's leading realtor company Emmar properties PSJC Dubai and MGF Development Ltd of India which develops properties like residential, commercial, retail and hospitality sectors across India. Emaar Properties PJSC of Dubai, one of the promoters, is among the world’s leading real-estate companies, with development of about 50 million square feet (sq ft) of residential, commercial and other business segments and operations in 16 countries end December 2007. Since 10 years, MGF has become one of the key players in retail real-estate development in north India.
Emmar MGF be only mobilizing land and had 13,024 acres of land as at 31-12-07, which would give 566 million sq. ft. of saleable area to the company. Of total land bank of the company 80% is agricultural land and not a single sq. ft. is in Mumbai, which is the remunerative real estate market, and dream of every realty company to own and develop property in this city. Of this, only 17.80 million sq. ft. is under development.
Emmar MGF Ltd is also developing a group housing project with a saleable area of 1.9 million sq ft as part of its 510-acre Boulder Hills including an international golf course under development and expected to be completed by this quarter end.The company has entered into JVs with Accor, France for the development and operation of budget hotels, and with Premier Inn, UK for the development and operation of mid-market hotels in India. The two JVs contain an exclusive clause: the budget hotel and mid-market brands of Accor and Premier Inn, respectively, will be developed only in association with EMLL. In addition, it has entered into agreement with various entities in the Intercontinental Hotels group.
Emmar MGF Ltd is currently developing a total of five hospitality projects in Kolkata, New Delhi, Dehradun and Amritsar and expected to have 635 keys in operation by the year ending March 2010 (FY 2010) and 1,135 keys in operation by FY 2011 as per the projects under development. However, it has planned to have about 3,825 keys from a slew of proposed hospitality projects. Of the five hotel projects, the one at Dehradun is a hotel-cum-convention project and the other in New Delhi is a luxury hotel.
The issue funds will be used as part payment for the acquisition of land and land development rights and related approvals for its ongoing and planned projects amounting Rs 872.80 crore. These funds will also be used for the development and construction cost of Palm Drive in Gurgaon (Rs 775.5 crore) and repayment of loans (Rs 1449.60 crore). Outstanding debt was Rs 5287.58 crore on 12 January 2008.
FY 07 financial performance (first year operations), posted a net loss of Rs.47 crores. For 6 months ending 30-09-07, the topline of the company was at Rs.502 crores with PAT of Rs.129 crores. With this kind of performance, the promoters of the company, are targetting to mobilize close to Rs.7,000 crores, by diluting close to 10%.
Apply Emmar MGF in a long term view only seems to be reatail portion will close below 3-5 times. If the market conditions improved at the time of listing Investors will get decent gains.
