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Vatika raises Rs 1,700 crore in a week
Despite the added uncertainty in the realty market after demonetisation, Vatika Group, one of the largest non-listed companies in the segment in the north, has managed to raise close to Rs 1,700 crore in less than 10 days from various investors.
The company plans to buy back (in 2017) the 20 per cent stake it sold to Goldman Sachs in 2014, said Gaurav Bhalla, managing director of Vatika Hotels, the group's hospitality arm.
In the latest round, Vatika Hotels raised Rs 495 crore from Axis Bank to finance its aggressive growth plans. The company has a major expansion on the anvil in 2017, in commercial real estate, hotels, hospitality and a new quick service restaurant (QSR) venture, which it aims to take abroad as well.
Within a week, Vatika Group sealed three major investment deals, while the rest of the market is fighting the effects of demonetisation. On Tuesday, Piramal Fund Management, the realty investment arm of Piramal Enterprises, extended Rs 425 crore as construction finance to Vatika Group's One on One commercial project in Gurgaon. Last Friday, it secured Rs 700 crore of funding from Altico Capital and closed the first tranche of Rs 475 crore.
"For us, business is normal and these investments reinforce the belief of the investor community in our company. This investment would be used in the next 36 months. In 2017, we have major expansion plans," said Bhalla.
The association with Axis Bank would help in implementation and delivery of around three million sq ft of housing, retail and office space, Bhalla said, adding that there was potential to add another million sq ft in the future.
"We have raised these funds essentially for the aggressive growth plans for Vatika Hotels, which includes construction of additional towers at the Westin Gurgaon and more villas at the Westin Resort and Spa," he said.
The company plans to expand its QSR venture. "We are planning to open around 25 outlets of our restaurant chain, Nukkadwala, across Delhi, Noida, Greater Noida, Faridabad and Bengaluru by the end of 2017. Next year, we will add another 35 across the country and open around 20 outlets in New York and London," Bhalla added.
After buying back the stake sold to Goldman Sachs, "If we need more funds, we might again talk to investors," he said.
They also plan to set up a chain of co-working spaces in Hyderabad, Bengaluru, Pune, Chennai, Delhi, Noida and Gurgaon. Presently, they have 15 Vatika Business Centres.
He said their Vatika India Next project, 623 acres in Sectors 82 to 85 in Gurgaon, an integrated township, had already developed social infrastructure such as school, retail spaces and hospitals, with a little over 3,000 families having moved in.