Investor: Wachovia Bank, Baer Capital & GS
Investment Value: $250 mn
Sharad Jhingan, CFO, Vatika Group told 4Ps B&M, “The major rationale for this deal for Vatika Group was indeed the capital. Apart from that there are many advantages that any company can have by tying up with good partners for their business and accepting funding by an international or multinational investors and the same accrue to Vatika as well. For any company like Vatika, you get a lot of global practices migrating into the corporate governance and after some time one can build a robust Corporate governance model. The set of investors that one get are not passive investor but active investors, which play a role in the decision making process. Everything that you do is scrutinised and you need to justify your action. This leads to a whole lot of transparency creeping into the organisation. If you plan to get listed, then the big metamorphosis is taking place rapidly. Your equity increases, your valuation improves, the worth of company is now established as you have foreign investors. All this helps you to leverage more and borrow more and grow more. From an old company, which was seen as very small you become very large and people accept you as very large. We see this relationship as a win-win situation for all the parties as we are partners in progression.”
Vatika Group has witnessed three big institutional investors, which have poured in funds to the tune of $250 million. The net worth of the Vatika Group’s real estate business was estimated at Rs.8,000 crores when this deal was struck. According to the company, these funds would help the company in its existing projects and also assist in consolidation of land banks that would help in acquiring new projects. Vatika is also evaluating plans to enter the stock market through an IPO but they are awaiting the right time.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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