MUMBAI: Gautam Adani, an Indian property magnate, just added $4.4 billion to his personal fortune.
Adani's Mundra Port & Special Economic Zone more than doubled on its first trading day in Mumbai, increasing the value of his family's 81.3 percent stake to about $8 billion.
Real estate "has caught the fancy of investors," said Jayesh Shroff, who holds property companies DLF and Indiabulls Real Estate among the $6 billion he helps manage at SBI Funds Management in Mumbai. "We could see many more billion-dollar property tycoons as investors pay a premium to own real-estate stocks."
The 10 richest property investors in India have more funds than Donald Bren, Donald Trump, Samuel Zell and the next seven wealthiest U.S. real-estate investors, Forbes magazine reported. Mumbai has the second-highest office rents in the world after the West End in London, according to data compiled by CB Richard Ellis.
Rents in Mumbai rose 55 percent in the past year to $189.51 per square foot, or 0.093 square meters, almost double the costs in midtown Manhattan, CB Richard Ellis reported.
Adani, 45, is among eight Indian developers whose wealth exceeded $1 billion for the first time this year, Forbes reported. A government plan to spend $500 billion on ports, roads and airports has lured investors to developers focusing on infrastructure.
Mundra Port, the largest cargo terminal outside government control in India, rose as much as 710 rupees, or $17.88, to 1,150 rupees on the Bombay Stock Exchange and traded 544 rupees higher at 984 rupees.
The IPO raised 17.7 billion rupees, or $446 million, this month with shares sold at 440 rupees. The IPO attracted $52 billion of bids, 116 times the stock for sale.
There was a lot of interest from investors since this was the first port and special economic zone company to be listed, Adani said at a listing ceremony at the Bombay Stock Exchange. "Infrastructure stocks are in favor right now."
Mundra Port is about 70 kilometers, or 45 miles, from the airport at Bhuj in the western state of Gujarat. The port can cater to companies including Reliance Industries, which is constructing the biggest refinery in the world in the state.
The port will handle 30 million tons of cargo this year, up from about 20 million tons last year, Adani said.
A state-backed plan for private companies to build special economic zones, or business enclaves with their own power, roads and commercial buildings, is also lifting developers' shares.
Anand Jain, who is building an economic zone near Mumbai with a school buddy, Mukesh Ambani, joined the Forbes list with a $4 billion fortune after his Jai soared this year, giving it a market value of $45 billion.
Jain's family members reaped $568 million last month selling a stake to investors including units of Merrill Lynch, Goldman Sachs and Morgan Stanley. The family still holds about 75 percent in Jai after the sale.
Jain said Nov. 19 that the company, which holds 10 percent in the trade zone venture, and partner Reliance Industries's chairman, Ambani, expect to get government approval for the 5,000 acre enclave this month.
Per capita income in India increased 40 percent in the past four years, helping real estate developers as prices for homes in the southern part of Mumbai almost doubled in the past two years, according to data compiled by Bloomberg.
Prices in New Delhi, Hyderabad, Bangalore and Chennai also climbed as more local and overseas companies expand operations.
Demand for homes near New Delhi helped DLF complete the biggest initial public offering in India this year. The July IPO lifted the fortune of the company's chairman, Kushal Pal Singh, to $35 billion, making him the richest property tycoon in the world, according to Forbes.
The surge in property prices may lift the value of share sales planned by real estate companies like Kolte-Patil Developers, Brigade Enterprises, a developer based in the southern city of Bangalore, and Prince Foundations.
Kolte-Patil, which constructs houses, offices and information-technology parks, plans to raise as much as 2.76 billion rupees selling shares for the first time. The IPO received bids for 46 times the stock on offer.
The government's five-year plan estimates a housing shortage of about 24.7 million units. Almost half of the 210 million households still live in temporary shelters, implying a significant demand for low-income and mid-income housing.
"This is a sunrise industry and we have just started off," said Pradeep Jain, chairman of Parsvnath Developers, who is ranked by Forbes as the 46th wealthiest person in India. "We could see 30 to 40 new billionaires from the real estate sector next year."
Nov 27, 2007
