Goldman Sachs Likely to Invest in Indian Real Estate Major

By: Propertiesmls

Sources confirm, leading American investment banker, Goldman Sachs is likely to ink a deal with real estate major DLF, investing close to Rs. 1,000-crore in the firm. The sources claim Goldman Sachs is bullish on investing in some of the Indian real estate major's on-going projects, including the one being developed in Delhi, part of a joint venture with Indiabulls. Earlier this year, Goldman Sachs announced plans for investing around Rs. 4,500-crore in various businesses in India, including, residential and commercial real estate and infrastructure projects.

However, when contacted by ET, a Goldman Sachs spokesperson said they would not comment on market rumours, and neither did Saurabh Chawla, DLF's Senior Vice President Finance confirm ongoing talks with the American investment banking major.

Sources confirming the move, were, however, not sure of the exact modalities to be followed by Goldman Sachs, while investing in the Indian real estate behemoth. According to inside news from Goldman Sachs, while discussions are on with DLF, Goldman Sachs may also initiate discussions with some other Indian developers. A tricky question, it remains to be asked as to how this investment would be treated, as the government has not allowed pre-IPO FDI in the real estate sector. Government officials maintain that FDI infusion before an IPO can only come in as portfolio investment, subject to a 10%-cap.

Goldman Sachs' association with DLF begins from when the former was a joint venture partner of Kotak, the lead banker in DLF's proposed IPO. However, earlier this year, DLF and Kotak broke a 10-year alliance, and subsequently, Goldman Sachs announced plans to set up its own business in India.

L.B. Entwistle, CEO Goldman Sachs India says his bank wants to introduce all their businesses, including asset management in the country over a period of time, while announcing plans for investing $1-billion in the sub-continent, over the next couple of years.

Sources confirm the investment banking firm is eyeing significant stakes in some extremely hot and booming real estate destinations, such as, the NCR, areas around Mumbai, and near the under-construction Bangalore International Airport. It is also believed to be bullish on areas close to already announced SEZs.

On an all time high, Indian real estate continues to grow in demand as it like other industries, begins to attract foreign direct investment on a gigantic scale!

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