Shanghai-based Fosun Group is reported to be planning to take an Rs 8 billion stake in Bengaluru real estate developer Nitesh Estates. If this is formalised it would be the Chinese conglomerate’s first M&A deal in the Indian real estate sector.
Billionaire Guo Guangchang-led Fosun, with more than $75 billion in assets, is likely to pick up around 50% stake as it looks to build a property platform to expand in India, newspapers have reported.
This would be Fosun’s second buy in India after snapping up controlling shares in Hyderabad-based Gland Pharma in a billion-dollar deal in 2016.
Reports have indicated that Nitesh is likely to issue shares to Fosun Property Holdings and IDERA Japan, which is controlled by the former, through preferential allotment.
Founder of the real estate firm Nitesh Shetty will retain 25% and continue to run operational management. The potential transaction would trigger a mandatory open offer by the company to public shareholders, though there are no delisting moves afoot now.
Nitesh has a portfolio of 20 million sqft of completed and under development residential and commercial projects. The company plans to use the proceeds to pare debts and fast track under development projects delayed by adverse market conditions.