Global investment powerhouse Blackstone has recently revealed its ambition to inject $100 billion into the Indian market. Following this announcement, the firm is set to acquire a 40% stake in Kolte Patil Developers (KDPL), a prominent real estate player based in Pune.
Blackstone’s Strategic Move in Real Estate
Through its subsidiary, BREP Asia III Holding Company, Blackstone will make a significant investment by purchasing a 14.3% stake (approximately 12.6 million shares) in KDPL at Rs 329 per share, totaling Rs 417 crore via a preferential issue. Additionally, they will buy another 25.7% stake from the company’s promoters for Rs 750 crore, bringing the total investment to Rs 1,167 crore.
- Total Investment: Rs 1,167 crore
- Initial Stake: 14.3% from the preferential issue
- Promoter Stake Acquisition: 25.7%
This acquisition comes at a discount from KDPL’s closing price of Rs 347.15 on the BSE as of Thursday. Following this deal, Blackstone plans to launch an open offer for an additional 26% stake, pushing their overall investment to around Rs 1,800 crore for a controlling interest in KDPL.
Market Reaction and Ownership Changes
The announcement positively influenced KDPL’s stock, which experienced a 2.53% increase, closing at Rs 347.15. Once the transactions are completed, Blackstone will join the existing promoters, the Kolte and Patil families, in their ownership structure. Currently, the promoter group holds 69.45% of KDPL, while institutional investors account for 9.01% and other shareholders hold 21.54%.
KDPL’s Growth and Future Prospects
Founded in 2007, KDPL has successfully developed 28 million square feet of real estate, with another 32.38 million square feet in various phases of execution. The company is setting ambitious business development targets, aiming for Rs 8,000 crore in FY25.
KDPL has carved a niche in the mid-segment and premium housing markets across Pune, Mumbai, and Bangalore, with around 70% of its revenue derived from Pune projects.
- Sales for First Nine Months of FY25: Rs 2,161 crore
- Year-on-Year Collections Growth: 17%
- Total Revenues: Rs 998.7 crore
- Net Profit: Rs 41.3 crore
The flagship project, Life Republic in Pune, boasts a sales volume of 1.5 million square feet, while the luxury residences are branded under the 24K label. The average selling price currently stands at Rs 8,394 per square foot.
Future Growth Trajectory
Research by Motilal Oswal indicates that after a period of stagnant pre-sales over the past two years, KDPL is poised for recovery with new project launches expected in H2 FY25. The upcoming project pipeline is valued at Rs 2,500 crore, suggesting a promising growth trajectory, with an anticipated 18% CAGR in pre-sales from FY24 to FY27.
While the group maintains a pre-sales target of Rs 3,500 crore for FY25, some delays in project approvals could push certain launches into FY26, prompting analysts to revise their target price for KDPL from Rs 620 to Rs 525.
In summary, Blackstone’s acquisition of a significant stake in KDPL marks a pivotal moment for the real estate sector in India, promising exciting developments for investors and stakeholders alike.
