Tata Sons will reportedly infuse Rs.500 crore into the group’s real estate arm, Tata Housing Development Company, through a fresh issue of equity shares, the company sources said.
The process to issue equity shares to the parent is expected to start in the next couple of weeks with an aim to complete it by the end of current fiscal year. This was the only other decision that was taken at Wednesday’s board meeting of the company, which appointed Cyrus P Mistry as the Deputy Chairman and a successor to Chairman Ratan Tata.
Tata Housing has refused to officially comment on this now. Currently, Tata Sons holds 99.78% of equity share capital of Tata Housing that was set up in 1984. In 2006, Tata Sons revived the realty developer by pumping in capital worth Rs.100 crore. Since then, the company’s revenue has jumped to over Rs.700 crore in 2010-11 from around Rs.50 crore in 2006-07.
The company has been using joint development model for most of its projects where the land owner becomes a partner instead of receiving consideration for the land, and has a development portfolio of over 44 million sq ft under various stages of execution. In addition to this, the company also has a project pipeline of over 19 million sq ft.
It already has presence in Mumbai, Gurgaon, Bengaluru, Pune, Ahmedabad, Chandigarh, Chennai, Kolkata and Goa, and is in the process of expanding its operations to other parts of India across tier I and II cities. Apart from this, it has also ventured into foreign markets like Maldives and is actively considering markets such as Sri Lanka, and other South Asian countries.
