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L G Balakrishnan Demerger + Jai Corp SEZ

October 15, 2007

L G Balakrishnan & Bros reportedly plans to spin off its forging division into a separate company so that the division can focus more in its core business and can seek independent joint ventures in future. Reports suggest that the company would list the forging unit on the bourses and the company has already set up a panel to fix the share swap ratio for demerger.

At the current price of Rs 26, the scrip trades at a PE multiple of 11.50, based on Q1 June 2007 annualised EPS of Rs 2.26. Face Value of Rs 1.

Jai Corp is a major promoter in developing the 5,250-acre Navi Mumbai Special Economic Zone, apart from Mukesh Ambani led Reliance Industries (RIL). Jai Corp is focusing on developing one of the largest special economic zones in India. Jai Corp is led by Mukesh Ambani’s friend, Anand Jain who has been with Mukesh Ambani for over 20 years now in Reliance Group.

JAI CORP Ltd has informed BSE that the promoters on October 15, 2007 have sold 2,19,00,000 (two crores & nineteen lakhs) equity shares of the Company through the floor of the exchange.

Jai Corp has invested in two multi product special economic zones near Mumbai – Navi Mumbai SEZ (NMSEZ) and Mumbai SEZ (MSEZ). Both the SEZs are being conceived and developed as a futuristic business hub and gateway for trade, commerce, industry, service and tourism. The NMSEZ will be set up as a joint venture with the City and Industrial Development Corporation (CIDCO) of Maharashtra holding 26%, and RIL holding the rest with Jai Corp.

As per recent reports, Jai Corp is planning to raise a venture capital corpus of Rs 40000 crore through its wholly owned subsidiary, Urban Infrastructure Venture Capital. Reports suggest that Jai Corp has already committed a capital of Rs 22,000 crore in 12 cities in India. The major investments would be in multiuse projects and townships (22% each), residential (15%) commercial (14%), industrial township (12%) and hospitality (6%).

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