Russian conglomerate Sistema to invest $100-200 million in Indian realty
08 Apr 2008
The realty scene in India in general, and New Delhi in particular, is set to get a major boost with the Commonwealth Games due in two years, and major foreign players are jostling to get a share of the pie. Russian conglomerate Sistema today announced plans to develop hotel, offices and residential complexes in major Indian cities with an initial investment of $100-200 million.
For its ambitious plans in India, the Russian giant has partnered with Shyam Group, which has already sold a majority 51 per cent stake in its telecom venture to Sistema, said Yevgeny Kolodkin, vice-president (strategy and business development) of Sistema's construction subsidiary. The joint venture is in the process of developing a 22- acre property in Gurgaon owned by Shyam Group promoter Rajiv Mehrotra.
Kolodkin said that the India venture will be Sistema's first construction and real estate venture outside Russia and Ukraine and the firm is likely to announce long-term plans in the sector soon, adding that they are also in talks with other players in this sector.
Sistema's construction subsidiary, Sistema Hals, is listed at London Stock Exchange. The group's turnover in the first nine months of 2007 stood at $9.6 billion.
Sistema Hals is currently present in nine locations across Russia and Ukraine and is looking to expand its footprint in other states of the erstwhile USSR as well as the fast growing economies of India and China.
Asked for specifics of future plans, Kolodkin said that they would initially concentrate on the metropolitan cities where they would operate on a build and rental basis. At the same time, he expressed eagerness to start operations at the earliest to capitalize on the upswing expected before the Commonwealth Games.
Sistema's entry in construction would also provide it synergy in its telecom venture. Sistema-Shyam have recently been allocated spectrum in various circles to offer mobile telephony and are hoping to become a pan-India player in the coming days. This is a similar strategy to that of Indian companies like DLF, Parsvanath and Reliance ADAG who have made their presences felt in both realty and telecom in recent times.
