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IPO lifts Indian property baron’s fortune by $6.3b

Shares of Mundra Port & SEZ more than double on debut on back of infrastructure boom

MUMBAI – INDIAN property magnate Gautam Adani has just added US$4.4 billion (S$6.34 billion) to his personal fortune.

His company, Mundra Port & Special Economic Zone (SEZ), more than doubled on its first trading day in Mumbai, boosting the value of his family’s 81.3 per cent stake to about US$8 billion.

Real estate ‘has caught the fancy of investors’, said Mr Jayesh Shroff of SBI Funds Management. ‘We could see many more billion-dollar property tycoons as investors pay a premium to own real-estate stocks.’

India’s 10 richest property investors have more funds than Mr Donald Bren, Mr Donald Trump, Mr Samuel Zell and the next seven wealthiest United States real-estate investors, Forbes Magazine reported.

Mumbai has the world’s second-highest office rents after London’s West End, according to data compiled by real-estate broker CB Richard Ellis. Rents in Mumbai rose 55 per cent in the past year to US$189.51 per sq ft, almost double the costs in mid-town Manhattan, CB Richard Ellis reported.

Mr Adani, 45, is among eight Indian developers whose wealth exceeded US$1 billion each for the first time this year, Forbes reported. A government plan to spend US$500 billion on ports, roads and airports has drawn investors to developers focusing on infrastructure.

Mr Adani’s Mundra Port, India’s largest cargo terminal outside government control, rose as much as 710 rupees to 1,150 rupees on the Bombay Stock Exchange (BSE) and finally ended 521.7 rupees, or 118.6 per cent, higher at 961.7 rupees.

The initial public offering (IPO) raised 17.7 billion rupees (S$642.5 million) this month with shares sold at 440 rupees each. The IPO attracted US$52 billion of bids, 116 times the stock for sale.

‘There was lot of interest from investors since this is the first port and SEZ company to be listed,’ Mr Adani said at a listing ceremony at the BSE yesterday. ‘Infrastructure stocks are in favour right now.’

Mundra Port is about 70km from the airport at Bhuj in the western state of Gujarat. The port can cater to companies including Reliance Industries, which is constructing the world’s biggest refinery in the state.

The port will handle 30 million tonnes of cargo this year, up from about 20 million tonnes last year, Mr Adani said.

A state-backed plan for private companies to build SEZs, or business enclaves with their own power, roads and commercial buildings, is also lifting developers’ shares.

Mr Anand Jain, who is building an economic zone near Mumbai with his school buddy Mukesh Ambani, joined the Forbes list with a US$4 billion fortune after his Jai Corp soared seven- fold this year, giving it a market value of US$45 billion.

Mr Jain’s family members last month reaped US$568 million selling a stake to investors including units of Merrill Lynch, Goldman Sachs and Morgan Stanley. The family still holds about 75 per cent in Jai after the sale.

Source: BLOOMBERG NEWS (The Straits Times 28 Nov 07)

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