India’s real estate sector is not in the pinkest of health. But the country’s capital markets are booming, and real estate developers too aren’t missing this chance, - which comes after two years - to raise money from primary markets. Now, Raheja Universal Ltd has joined the IPO fray. The surname Raheja is noted in the industry as much as the Tatas, Birlas, Ambanis, Godrejs, & Mahindras, but in capital markets they have had only a smaller presence, especially in their staple of real estate development. Confusing things further for investors, there are too many Raheja groups in business, some connected, some sharing nothing but the Raheja tag.
Rahejas need no introduction in India Inc. The noted surname is associated with almost every happening sector in Indian industry, including real estate. However, a rank outsider would find it difficult to understand the connect or dis-connect between various Rahejas, simply because there are too many successful and not-so-successful Rahejas around.
For example, in real estate alone, there are at least five to six successful Raheja clans, some connected, some unconnected.
It is in this backdrop that three Rahejas - Father Suresh Raheja, and sons Rahul Raheja and Ashish Raheja - are taking their real estate development firm, Raheja Universal Ltd into the listed space through an IPO. The move is noteworthy as they are not the biggest of Rahejas, even in real estate. But they are all set to prove that they are the fastest.
For most considerations, Raheja Universal Ltd is an independent company unconnected to any other Rahejas. Still, Raheja Universal and its promoters have co-developed with some other Rahejas in the past.
Their immediate connection is with K Raheja Corp (ventures include Shoppers Stop / Crossword / Inorbit Mall / Mindspace) led by brother Chandru L (CL) Raheja, which together with Raheja Universal, was part of the K Raheja Group.
They are less connected with another ‘brotherly’ firm K Raheja Constructions led by Gopal (GL) Raheja, as also cousin-brotherly firm B Raheja Builders (projects include JW Marriott in Bangalore’s UB City) which had later split into two firms, V Raheja & Advantage Raheja.
Then there is NCR-Delhi based Raheja Developers, led by Navin M Raheja, with whom Raheja Universal doesn’t seem to have much connection.
And finally there is the vast R Raheja Group (ventures include Exide / HR Johnson / Outlook / Hathway Cable / Asianet Satcom / Trident Hotels / Globus Stores / Prism Cement / Supreme Industries / ING Life) led by the reclusive billionaire Rajan Raheja, who still has sizeable assets in real estate development.
Still, for all these Raheja Groups active in real estate, Raheja Universal is going to be the first listed developer with this surname. And this is going to help a bit as Mumbaikars readily associate the surname with realty development.
While Suresh Raheja is backed by three decades of experience in realty development, Rahul Raheja is backed by experience as well as an MBA from London School of Economics, while brother Ashish Raheja is a gold medallist from Sydenham College.
Together, they have created a reasonable brand in Mumbai real estate, which even while focusing on large-scale residential projects in Mumbai Metropolitan Region, has had some commercial successes too like the Standard Chartered Towers and Motilal Oswal HQ.
Raheja Universal’s ambitions is evident not only in this IPO, but in their unique tagline – ‘The World to Come’ – as well as their Superbrand status.
But in capital markets, a lot will depend on how the market values realty businesses, with both the realty index as well as recent realty IPOs continuing to under-perform the broader indices like Sensex, Nifty, & the BSE IPO Index.
If Raheja Universal can succeed in getting its IPO rated at 4/5 and if they are willing to offer it to investors at reasonable valuations, this should be a realty IPO to watch out for.