Final Sa Assgmnt

8/6/2019 Final Sa Assgmnt

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INTRODUCTION TO THE IPO

Godrej Properties came out with an IPO of 9,429,750 equity shares of Rs 10 each. The issue was opened

for subscription on December 9 and closed on December 11, 2009. The issue constitute 13.5% of the post

issue paid-up capital of the company. Godrej Industries, the parent company, at that time holds 80.26% of

equity share capital in the company. The company is in the business of real estate development in India. It

currently has real estate development projects in 10 cities in India, which are at various stages of

development. The proceeds of the issue was used for acquisition of land development rights for

forthcoming projects; construction of forthcoming project and repayment of loans. The equity shares were

proposed to be listed on the BSE and NSE. For the year ended March 31, 2009, the company reported

profit after tax of Rs 74.74 crore on total income of Rs 188.13 crore. As on June 30, 2009, it has debt of Rs 745.78 crore on its books.

Global Co-ordinators and book running lead managers to the issue were ICICI Securities Limited, Kotak

Mahindra Capital Company Limited, IDFC ± SSKI Limited and Nomura Financial Advisory and

Securities (India) Private Limited. Karvy Computershare Private Limited was the registrar.

We would not recommend investors to invest in this IPO. Watch out this blog for details on subscription,

allotment and listing!

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the Issue, including devolvement of underwriters within 60 days from the Bid/Issue Closing Date, the Company shall forthwith refund the

entire subscription amount received. If there is a delay beyond eight (8) days after the Company becomesliable to pay the amount, the Company shall pay interest prescribed under Section 73 of the Companies

Act.If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be

refunded forthwith.Further, we shall ensure that the number of prospective allotees to whom Equity Shares will be allotted

shall not be less than 1,000.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any

other jurisdiction outside India and may not be offered or sold, and Bids may not be made by

persons in any such jurisdiction.

Restriction on transfer of shares

Except for lock-in of the pre-Issue Equity Shares and Promoters¶ minimum contribution in the Issue asdetailed in the section entitled ³Capital Structure´ on page 26 of this Draft Red Herring Prospectus, and

except as provided in our Articles, there are no restrictions on transfers of Equity Shares. There are norestrictions on transfers of debentures except as provided in our Articles. There are no restrictions on

transmission of shares/debentures and on their consolidation/ splitting except as provided in our Articles



TERMS OF THE ISSUE

The Equity Shares being issued are subject to the provisions of the Companies Act, our Memorandum andArticles, the terms of this Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus,

Bid cum Application Form, the Revision Form, the CAN and other terms and conditions as may beincorporated in the Allotment advices and other documents/ certificates that may be executed in respect of

the Issue. The Equity Shares shall also be subject to laws, guidelines, notifications and regulations relatingto the issue of capital and listing of securities issued from time to time by SEBI, the Government of India,

Stock Exchanges, RoC, RBI and/or other authorities, as in force on the date of the Issue and to the extentapplicable.

Ranking of Equity Shares

The Equity Shares being issued shall be subject to the provisions of our Memorandum and Articles of

Association and shall rank pari-passu with the existing Equity Shares of the Company including rights in

respect of dividend. The Allotees in receipt of Allotment of Equity Shares under this Issue will be entitled

to dividends and other corporate benefits, if any, declared by the Company after the date of Allotment.

For further details, please see ³Main Provisions of the Articles of Association´ on page 392 of this Draft

Red Herring Prospectus.

Mode of Payment of Dividend

We shall pay dividends to our shareholders in accordance with the provisions of the Companies Act. Face

Value and Issue Price The face value of the Equity Shares is Rs. 10 each and the Issue Price is Rs per

Equity Share. The Anchor

Investor Issue Price is Rs. 10 per Equity Share. At any given point of time there shall be only one

denomination for the Equity Shares

Category No. of Applications No. of Shares No. of times subscription

A Retail Individual Bidders 18,300 1,025,235 0.36

B Non Institutional Bidders 50 343,837 0.36

C Qualified Institutional Bidders 57 29,503,552 7,45

D Anchors 4 2,686,528 1.58

Total 18,411 33,559,152 3.56

Final Demand

The final demand at different bid prices is as under:

Bid Price No. of Shares % to total Cumulative Total Cumulative % of Total

490 21,917,584 70.82 30,948,996 100.00

491 26 0.00 9,031,412 29.18

492 65 0.00 9,031,386 29.18493 - 0.00 9,031,321 29.18

494 - 0.00 9,031,321 29.18

495 221 0.00 9,031,321 29.18

496 26 0.00 9,031,100 29.18

497 - 0.00 9,031,074 29.18

498 13 0.00 9,031,074 29.18

499 - 0.00 9,031,061 29.18

500 801,983 2.59 9,031,061 29.18

501 78 0.00 8,229,078 26.59



502 65 0.00 8,229,000 26.59

503 - 0.00 8,228,935 26.59

504 - 0.00 8,228,935 26.59

505 117 0.00 8,228,935 26.59

506 13 0.00 8,228,818 26.59507 - 0.00 8,228,805 26.59

508 13 0.00 8,228,805 26.59

509 - 0.00 8,228,792 26.59

510 41,171 0.13 8,228,792 26.59

511 - 0.00 8,187.621 26.46

512 91 0.00 8,187,621 26.46

513 13 0.00 8,187,530 26.45

514 - 0.00 8,187,517 26.45

515 221 0.00 8,187,517 26.45

516 - 0.00 8,187,296 26.45

517 - 0.00 8,187,296 26.45

518 26 0.00 8,187,296 26.45

519 - 0.00 8,187,270 26.45

520 1,170 0.00 8,187,270 26.45

521 - 0.00 8,186,100 26.45

522 - 0.00 8,186,100 26.45

523 - 0.00 8,186,100 26.45524 - 0.00 8,186,100 26.45

525 819 0.00 8,186,100 26.45

526 - 0.00 8,185,281 26.45

527 13 0.00 8,185,281 26.45

528 39 0.00 8,185,268 26.45

529 13 0.00 8,185,229 26.45

530 8,185,216 26.45 8,185,216 26.45

The Basis of Allocation was finalized in consultation with the Designated Stock Exchange, being theBombay Stock Exchange Limited ("BSE") on December 23, 2009.

ISSUE STRUCTURE

Issue of 9,429,750 Equity Shares for cash at a price of Rs. 10 per Equity Share (including share premium

of Rs. 2 per Equity Share). The Issue will constitute 13.5% of the post-issue paid-up capital of the

Company. The Company is considering a pre-IPO placement of up to 2,444,750 Equity Shares with

certain investors (³Pre-IPO Placement´). The Pre-IPO Placement is at the discretion of the Company. The

Company will complete the issuance, if any, of such Equity Shares prior to the filing of the Red Herring

Prospectus with the ROC. If the Pre-IPO Placement is completed, then the Issue size offered to the public

will be reduced to the extent of such Pre-IPO Placement, subject to a minimum Issue size of 10% of the

post Issue capital being offered to the public



QIBs Non-Institutional

Bidders

Retail Individual

Bidders

Number of Equity

Shares

At least 5,657,850

Equity Shares

Not less than 942,975

Equity Sharesavailablefor allocation or Issue

less allocation to QIBBidders and Retail

Individual Bidders.

Not less than

2,828,925Equity Sharesavailable

for allocation or Issueless allocation to QIB

Bidders and Non-Institutional Bidders.

Percentage of IssueSize

available for Allotment/allocation

At least 60% of theIssue

Size being allocated.However, up to 5% of

the QIB Portion(excluding the Anchor

Investor Portion) shall be

available for allocation

proportionately toMutual Funds only.

Not less than 10% of Issue or the Issue less

allocation to QIBBidders and Retail

Individual Bidders.

Not less than 30% of the

Issue or the Issue lessallocation to QIB

Bidders and Non-Institutional Bidders.

Basis of Allotment/Allocation

if

respective category isoversubscribed

Proportionate asfollows:

(a) 282,893 Equity

Shares shall beallocatedon a proportionate

basisto Mutual Funds; and

(b) 5,374,957 EquityShares shall be

allottedon a proportionate

basisto all QIBs including

Mutual Fundsreceiving

allocation as per (a)above.

Proportionate Proportionate

Minimum Bid Such number of Equity

Shares that the BidAmount exceeds Rs.

100,000 and inmultiples of [�] Equity

Shares thereafter.

Such number of Equity

Shares that the BidAmount exceeds Rs.

100,000 and inmultiples of [�] Equity

Shares thereafter.

Equity Shares

Maximum Bid Such number of EquityShares not exceeding

theIssue, subject to

applicable limits.

Such number of EquityShares not exceeding

theIssue subject to

applicable limits.

Such number of EquityShares whereby the

BidAmount does not

exceed Rs. 100,000.

Mode of Allotment Compulsorily in

dematerialised form

Compulsorily in

dematerialised form.

Compulsorily in

dematerialised form.



Bid lot Equity Shares and in

multiples of [_]Equity

Shares thereafter.

Equity Shares and in


Shares thereafter.



Shares thereafter.

Allotment Lot Equity Shares and in

multiples of 1 EquityShare thereafter





Trading Lot One Equity Share One Equity Share One Equity Share

Terms of Payment Margin Amount shall

be payable at the time of

submission of Bid

cumApplication Form tothe

Syndicate Members.

Amount shall be

payableat the time of

submission

of Bid cumApplicationForm.

Amount shall be

payableat the time of

submission

of Bid cumApplicationForm.

Margin Amount Up to 10% of Bid

Amount

Full Bid Amount on

bidding

Full Bid Amount on

bidding

BASIS OF ALLOTMENT

A. For Retail Individual Bidders� Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to

determine the total demand under this category. The Allotment to all the successful Retail IndividualBidders will be made at the Issue Price.

� The Issue size less Allotment to Non-Institutional and QIB Bidders shall be available for

Allotment to Retail Individual Bidders who have bid in the Issue at a price that is equal to or greater than

the Issue Price.

� If the aggregate demand in this category is less than or equal to [_] Equity Shares at or above the Issue

Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid Bids.

� If the aggregate demand in this category is greater than [_] Equity Shares at or above theIssue Price, the Allotment shall be made on a proportionate basis up to a minimum of [�] Equity Shares.

The Basis of Allocation to the Retail Individual Bidders, who have bid at cut-off or at the Issue

Price of Rs.490/- per Equity Share, was finalized in consultation with BSE. This category has been

subscribed to the extent of 0.35 times. Hence full and firm allotments were made to all valid

applicants in this category. The total number of Equity Shares allotted in Retail Individual Bidderscategory is 1,010,815 Equity Shares to 18,075 applicants. 4,932 applications for 247,728 Equity

Shares were made under the ASBA process. 4,910 applications for 247,013 Equity Shares were

found valid and they were considered for allotment.

B. For Non-Institutional Bidders

� Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together todetermine the total demand under this category. The Allotment to all successful

Non-Institutional Bidders will be made at the Issue Price.

� The Issue size less Allotment to QIBs and Retail Portion shall be available for Allotment to



Non-Institutional Bidders who have bid in the Issue at a price that is equal to or greater than the IssuePrice. 372

� If the aggregate demand in this category is less than or equal to [_] Equity Shares at or above the Issue

Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.

� In case the aggregate demand in this category is greater than [_] Equity Shares at or above the IssuePrice, Allotment shall be made on a proportionate basis up to a minimum of [�] Equity Shares. For the

method of proportionate basis of Allotment refer below.

The Basis of Allocation to the Non institutional Investors, who have bid at or above the Issue Price

of Rs 490/- per Equity Share, was finalized in consultation with BSE. The category was subscribed

0.36 times. Hence full and firm allotments were made to all valid applicants in this category. The

total number of shares allotted in this category is 342,186 Equity Shares to 48 applicants.

C. ForQIBs

� Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine

the total demand under this portion. The Allotment to all the QIB Bidders will be made at the Issue Price.

� The QIB Portion shall be available for Allotment to QIB Bidders who have bid in the Issue at a pricethat is equal to or greater than the Issue Price.

� Allotment shall be undertaken in the following manner:

A. In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion (excluding Anchor Investor Portion) shall be determined as follows:

(i). In the event that Mutual Fund Bids exceeds 5% of the QIB Portion (excluding Anchor Investor Portion), allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB

Portion (excluding Anchor Investor Portion).

(ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the QIB Portion(excluding Anchor Investor Portion) then all Mutual Funds shall get full Allotment to the extent of valid

bids received above the Issue Price.

(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall be available for Allotment to all QIB Bidders as set out in (b) below;

B.) In the second instance Allotment to all QIBs shall be determined as follows:

(i) In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids

above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the QIBPortion.

(ii) Mutual Funds, who have received allocation as per (a) above, for less than the number of Equity

Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders.

(iii) Under-subscription below 5% of the QIB Portion (excluding Anchor Investor Portion), if any, from

Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

2,418,899 equity shares being the aggregate unsubscribed portion from Retail Individual Investors

& Non Institutional Investors category were added to the QIB Category and hence the total number

of shares allotted to QIBs were 8,076,749. Since, Anchor Investors were allotted 1,697,345 shares,

the balance shares available for allotment to QIBs was arrived at 6,379,404. Allocation to QIBs have

been done on a proportionate basis in consultation with the Bombay Stock Exchange Limited. As

per the SEBI Regulations, Mutual Funds were initially allotted 5% of the quantum of shares

available (318,970) and other QIBs and unsatisfied demands of Mutual Funds were allotted the

remaining available shares (6,060,434) on proportionate basis. Mutual Funds were allotted 5% for

QIB segment and other QIB applicants were allotted 55% of the shares for QIB segment.



Category Fls/Banks MFs Flls Insurance Companies Total

No. of Shares 792,875 2,761,987 3,384,208 1,137,679 8,076,749

D. For Anchor Investor Portion

� Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at

the discretion of the Company, in consultation with the GCBRLMs and the BRLMs, subjectto compliance with the following requirements:

o not more than 30% of the QIB Portion will be allocated to Anchor Investors;o one-third of the Anchor Investor Portion shall be reserved for domestic Mutual

Funds, subject to valid Bids being received from domestic Mutual Funds at or abovethe price at which allocation is being done to Anchor Investors;

o allocation to Anchor Investors shall be on a discretionary basis and subject to aminimum number of two Anchor Investors for allocation upto Rs. 2,500 million and

minimum number of five Anchor Investors for allocation more than Rs. 2,500million.

� The number of Equity Shares Allotted to Anchor Investors and the Anchor Investor Issue

Price, shall be made available in the public domain by the GCBRLMs and the BRLMs beforethe Bid Opening Date by intimating the stock exchanges and uploading the said details on the

websites of the BRLMs and on the terminals of the Syndicate Members.

The Company allocated 1,697,345 Equity Shares to 4 Anchor Investors in consultation with the

Global Co-ordinaters and Book Running Lead Managers and Book Running Lead Managers. This

represents 30% of the QIB Portion.

Method of Proportionate Basis of Allotment in the Issue

In the event of the Issue being over-subscribed, the Company shall finalise the basis of Allotment in

consultation with the Designated Stock Exchange. The Executive Director (or any other senior officialnominated by them) of the Designated Stock Exchange along with the GCBRLMs, the BRLMs and the

Registrar to the Issue shall be responsible for ensuring that the basis of Allotment is finalised in a fair andproper manner.

The Allotment shall be made in marketable lots, on a proportionate basis as explained below:a) Bidders will be categorised according to the number of Equity Shares applied for. b) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a

proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse

of the over-subscription ratio.c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate

basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by theinverse of the over-subscription ratio.

d) In all Bids where the proportionate Allotment is less than [�] Equity Shares per Bidder, the Allotmentshall be made as follows:

� The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a manner such that the total number of Equity Shares allotted in that category is equal

to the number of Equity Shares calculated in accordance with (b) above; and� Each successful Bidder shall be allotted a minimum of [�] Equity Shares.

e) If the proportionate Allotment to a Bidder is a number that is more than [�] but is not a multiple of 1(which is the marketable lot), the decimal would be rounded off to the higher whole number if that

decimal is 0.5 or higher. If that number is lower than 0.5 it would be rounded off to the lower wholenumber. Allotment to all in such categories would be arrived at after such rounding off.

f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Sharesallotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be first

adjusted against any other category, where the allotted shares are not sufficient for proportionate

Allotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after



such adjustment will be added to the category comprising Bidders applying for minimum number ofEquity Shares.

g) Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors shall be at thesole discretion of the Company, in consultation with the GCBRLMs and the BRLMs.

INFORMATION FROM PROSPECTUS

Full name of the co-

GODREJ PROPERTIES LIMITED

Registered and Corporate Office:

Godrej Bhavan, 4 Th, Floor, 4A, Home Street, Fort, Mumbai ± 400 001

Company Secretary and Compliance Officer:

Mr. Shodhan A. Kembhavi

Number and type of issue ±

9,429,750 Equity Shares of Rs. 10 ,

Face Value:

Rs. 10 Per Equity Share

Price band-

Rs. 490 - Rs. 530 Per Equity Share

Name of promoter-

Godrej & Boyce Manufacturing Company Limited and Godrej Industries Limited

Risk factor

This being the first public issue of Equity Shares of the Company, there has been no formal market for theEquity Shares of the Company. The face value of the Equity Shares is Rs. 10 per Equity Share. The Issue

Price (as determined by the Company in consultation with the GCBRLMs and the BRLMs as stated under the section on ³Basis for Issue Price´) should not be taken to be indicative of the market price of the

Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of the Company or regarding the price at which the Equity Shares

will be traded after listing. Investments in equity and equity-related securities involve a degree of risk andinvestors should not invest any funds in this Issue unless they can afford to take the risk of losing their

investment. Investors are advised to read the Risk Factors carefully before taking an investment decisionin this Issue. For taking an investment decision, investors must rely on their own examination of the

Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not beenrecommended or approved by the Securities and Exchange Board of India (³SEBI´), nor does SEBI

guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of theinvestors is drawn to the section titled ³Risk

Factors´ beginning on page xiv of this Draft Red Herring Prospect Dividend policy-The declaration

and payment of dividends will be recommended by our board of directors and approved by our

shareholders, in their discretion, and will depend on a number of factors, including but not limited to



our earnings, capital requirements and overall financial position. Our Company has no stated dividend

policy. The dividend paid by the Company in the last five fiscals is as provided herein:

Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009

Face Value Per share 10.00 10.00 10.00 10.00 10.00

Dividend (Rs. Million)* 25.50 62.00 270.00 246.12 151.05

Dividend per equity share 3.956 9.621 41.896 10.00 2.50

Dividend rate 39.56% 96.21% 418.96% 100.00% 25%

(% to paid up capital

Method of Proportionate Basis of Allotment in the Issue-

In the event of the Issue being over-subscribed, the Company shall finalise the basis of Allotment inconsultation with the Designated Stock Exchange. The Executive Director (or any other senior official

nominated by them) of the Designated Stock Exchange along with the GCBRLMs, the BRLMs and theRegistrar to the Issue shall be responsible for ensuring that the basis of Allotment is finalised in a fair and

proper manner.

The Allotment shall be made in marketable lots, on a proportionate basis as explained below:

a) Bidders will be categorized according to the number of Equity Shares applied for.

b) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a

proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse

of the over-subscription ratio.

c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by the

inverse of the over-subscription ratio.

d) In all Bids where the proportionate Allotment is less than [�] Equity Shares per Bidder, the Allotmentshall be made as follows:

� The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in amanner such that the total number of Equity Shares allotted in that category is equal to the number of

Equity Shares calculated in accordance with (b) above; and

� Each successful Bidder shall be allotted a minimum of [�] Equity Shares.

e) If the proportionate Allotment to a Bidder is a number that is more than [�] but is not a multiple of 1(which is the marketable lot), the decimal would be rounded off to the higher whole number if that

decimal is 0.5 or higher. If that number is lower than 0.5 it would be rounded off to the lower wholenumber. Allotment to all in such categories would be arrived at after such rounding off.

f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares374 allotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be

first adjusted against any other category, where the allotted shares are not sufficient for proportionateAllotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after

such adjustment will be added to the category comprising Bidders applying for minimum number of Equity Shares.



g) Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors shall be at thesole discretion of the Company, in consultation with the GCBRLMs and the BRLMs. bankers to the issue-

State Bank of India, IDBI Bank Limited book running lead managers-ICICI Securities Limited, Kotak Mahindra Capital Company Limited, IDFC ± SSKI Limited, Nomura Financial Advisory And Securities

(India) Private Limited

IPO Details

GPL is coming out with an IPO (fresh issue of 0.94cr shares) in the price band of Rs490-530 a share. The

company proposes to use the issue proceeds for acquisition of land development rights for upcoming projects, construction of upcoming projects, repayment of loans and to meet working capital

requirements.

Objects of the Issue:

The objects of the Issue are to achieve the benefits of listing on the Stock Exchanges & to raise capital to:

1. Acquisition of land development rights for Forthcoming Projects;

2. Construction of their Forthcoming Project;3. Repayment of loans; and

4. General Corporate Purposes.

Godrej Properties Ltd GPL IPO Grading / Rating

ICRA has assigned a 'ICRA IPO Grade 4' [Grade Four] to the proposed IPO issue of Godrej Properties

Ltd (GPL). 'ICRA IPO Grade 4' indicates above average fundamentals. ICRA assigns IPO grades on ascale of Grade 5 to Grade 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating pool

fundamentals.

Issue Subscription Detail / Current Bidding Status

Number of Times Issue is Subscribed (BSE + NSE)

As on Date & Time

Qualified

Institutional

Buyers (QIBs)

NonInstitutional

Investors

(NIIs)

RetailIndividual

Investors

(RIIs)

Total

Shares Offered / Reserved 3,960,505 942,975 2,828,925 7,732,405

Day 1 - Dec 09, 2009 17:00 IST 2.3907 0.0074 0.0206 1.2300

Day 2 - Dec 10, 2009 17:00 IST 2.4261 0.0543 0.0833 1.2800

Day 3 - Dec 11, 2009 17:00 IST 7.4494 0.4090 0.3753 4.0000

Listing Day Trading Information



BSE

Issue Price: Rs. 490.00

Open: Rs. 510.00

Low: Rs. 500.00

High: Rs. 586.70Last Trade: Rs. 534.55

Volume: 5,260,628

NSE

Rs. 490.00

Rs. 511.00

Rs. 502.15

Rs. 586.80Rs. 537.25

8,707,481

ANALYSIS OF THE GODREJ PROPERTIES LIMITED AS A COMPANY

Unique business model: Godrej Properties Limited (GPL) intends to develop its projects through joint

development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This

model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners.

- Illustrious Parentage: The Godrej brand name has been associated with quality and strong corporategovernance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have

given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL couldleverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer

preference towards it), assuring a timely delivery of execution.

- Projects skewed towards long-gestation townships: More than 50% of GPL's existing land bank is

exposed towards township projects and in one location (Ahmedabad), which will be executed over thenext ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV

estimates, as 50% of our NAV is derived from this project.

- Too early to discount Vikhroli land: The Maharashtra government has repealed the ULCA (Urban

Land Ceiling Act), with the intention of creating more, low cost housing. As per media reports, GPLcould get access to a substantial portion of land parcels in the central suburbs of Mumbai. The

management intends to create a model similar to the Bandra-Kurla Complex, once it has access to largetracts of land in the central suburbs. However, confusion over the repeal of the ULCA still prevails, as the

BMC (Brihanmumbai Municipal Corporation) is yet to finalize a way to ensure whether the land belongsto the builder or the Government. This confusion would be ended once the ULCA provides the BMC with

a list of its holdings. We believe that due to a lack of clarity, it is too early to discount access to land for GPL in our one-year forward NAV.

- Fairly Valued: Our fair NAV for GPL (based on its existing land bank) works out to Rs469/share.



Around 50% of the NAV is derived from its township project in Ahmedabad. We have factored in a 5% price escalation from FY2011E onwards in the construction and capital value for all its residential projects

from the current levels, and a 5% correction in Rentals in FY2011E, but a 5% increase from FY2012Eonwards for all its commercial and retail projects. We believe that the IPO is fairly priced and keep a

Neutral view on it. However, investors can look at alternate, existing listed players like Anant Raj,

which have a debt-free balance sheet, land at prime locations and is trading at a significant discountto our one-year forward NAV.

Land bank details

So far, the company has developed a total of 23 projects, comprising of 16 residential and seven

commercial projects, aggregating to an area of approximately 5.1mn sq ft. GPL's total land reservecurrently stands at 391 acres, translating into a saleable area of 50.2mn sq ft. Around 50% of its saleable

area is coming from the Ahmedabad township project, which will be executed over the next ten years. Theoutstanding land payments towards the acquisition of 391 acres currently stand at Rs293cr, which will be

paid through the IPO proceeds.

Mix of Land Reserves

GPL is in the middle of a swift transition, in terms of the contribution of its land reserves to the overall

product portfolio. A0s it began with a focus on residential sector, around 3.9mn sq ft of its completed project pipeline came from the residential sector. However, the contribution break-up of ongoing projects

paints a different picture, as commercial projects comprise of around 11.4mn sq ft of the total 32.1mn sqft. The forthcoming projects mark a substantial shift in GPL's portfolio, as nearly 11.4mn sq ft of the total

18.1mn sq ft shall be contributed by the commercial segment.

Concrete Business Strategy

The relatively established players in the Real Estate business possess an edge over GPL in terms of a

larger acreage of land reserves (with the same being bought at relatively lower average acquisition costsover a period of time). In order to match the size of such players, GPL would have to commit a huge

amount of capital to build up substantial land reserves, which would also involve a long pay-back periodafter development. However, to counter the same, GPL has devised a unique strategy, whereby it intends

to develop its projects through joint development agreements with land owners. Under this asset-lightmodel, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an

outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint

developments with partners.

Return and capital gain of the company it now

Return -

5 jan2009 ± 29july 2011

(762-537.5)/762*100 = 29.4619%

Capital gain -

[(762-537.5)+4]/762*100=28.937%



Peer

Companies

Price

Rs.

Change

Rs.

Change

%

EPS

Rs.TTM P/E

Dividend

Yield

1YrReturn

(%)

DLF 230.75 -0.15 -0.06 7.4787 30.87 0.87 -25.4

Unitech 31.5 0.8 2.61 1.9496 15.75 0.33 -62.03

Oberoi

Realty236.3 0.4 0.17 5.1965 45.4 0.42

Jaypee

Infratech47.1 0.15 0.32 10.3321 4.54 2.66 -44.13

HDIL 143.95 1.45 1.02 21.6002 6.6 0 -45.27

Godrej

PropertiesLtd.

767.6 -9.55 -1.23 12.9831 59.86 0.58 16.45

Prestige

Estate Proj135.05 3.8 2.9 6.2044 21.15 0.91

Indiabulls

Real Est.100.05 0.45 0.45 1.1119 89.58 0.3 -39.84

Phoenix

Mills213.55 2 0.95 6.3045 33.56 0.57 -4.9

Sobha

Developers260.3 0.55 0.21 18.6062 13.96 1.15 -21.71

Anant Raj

Inds81.4 -0.25 -0.31 5.6751 14.39 0.73 -29.98

Omaxe 137.95 1.05 0.77 3.6012 38.02 0 24.79

Peninsula

Land51.75 0 0 6.205 8.34 3.29 -25

Parsvnath

Developers47.15 0.6 1.29 1.7344 26.84 0 -27.24

DB Realty 74.75 -3.45 -4.41 10.5112 7.44 0 -82.39

Sunteck

Realty293.55 2.05 0.7 0.9577 304.39 0.08 -53.55

Puravankara

Projects75 -1.85 -2.41 3.9297 19.56 1.3 -32.13

MVL 24.25 -0.1 -0.41 0.3703 65.76 0.21 -31.74

Mahindra

Life. Dev.356.65 3.6 1.02 25.8748 13.64 1.42 -24.75

Ashoka

Buildcon273.4 3.5 1.3 16.0962 16.77 0

Documents

Final Sa Assgmnt