Arvind to form JV with B Safal for residential project

MUMBAI (makemystocks): Arvind Ltd (BOM:500101) on Monday said it will form a joint venture with B Safal group to develop a residential complex in Gujarat. The shares of the company rose to 5.53 per cent from the previous close, on the Bombay Stock Exchange (BSE).

In a news release, Arvind said the 1 million square feet residential complex is expected to be worth Rs 2.25 billion when completed.

One-third of the complex will be built on land owned by Arvind arm Ashok Costyn in Khokhra in Ahmedabad.

B Safal group will buy another one-third of land area and pay Rs 700 million for 50% stake in the joint venture.

"This is a good proposal for Arvind as it is not only realising cash up front but is also keeping the upside of appreciation open as Arvind is retaining about one-third of land for future development. We expect to raise about Rs 2 billion from sale and development of the said land at Costyn over next two years," Director and Chief Financial Officer Jayesh Shah said in the release.

The joint venture is expected to result in development of anywhere between 1,200 and 1,500 2BHK and 3BHK residential units.

Arvind, which holds about 600 acres of land in and around Ahmedabad, has applied for two townships as per the new township policy of the Gujarat government. Arvind has floated a 100% subsidiary company Arvind Infrastructure which is engaged in the real estate development.

Arvind operates in the real estate sector through subsidiary Arvind Infrastructure Ltd.