arun

Omaxe Ltd., which has applied with regulators to launch an IPO, expects its sales to grow at faster than 30 percent annually over the next five years, partly because of its investments in sought-after retail properties. The firm was originally slated to raise up to US$339 million in its Mumbai IPO when papers were filed in December, but recent media reports have put the figure at closer to US$200 million because of a stock market slide and investor unease over developers' land valuations.

Omaxe Chief Executive Arvind Parakh declined to say how much the company expected to raise from the sale of 10-11 percent of its equity, adding only that the environment had changed since late December. But he predicted that Omaxe, with sales of around US$400 million last year, would expand faster than the 30 percent annual growth projected for the country's $15 billion property development industry. "We're confident of growing faster than these numbers," Parakh told Reuters on the sidelines of a property conference. "The biggest growth of all will be in retail, because organised retail makes up just 3 percent of the market."

Around a quarter of Omaxe's projects are in the retail arena, mostly inside its integrated township developments, but also including giant shopping malls in New Delhi and Noida, a suburb of the capital. The company has a land bank of around 3,000 acres in 30 cities. Indian property firms have faced a backlash over the practice of pricing themselves based on the values of their land banks -- which have soared over the past three years -- and not by conventional discounted cash flow valuations. Parakh said he was "keeping fingers crossed" that regulators would approve Omaxe's IPO, which is being arranged by Citigroup, UBS, Merrill Lynch and JM Morgan Stanley.