ICICI invests Rs250 crore in HCC subsidiary Lavasa

India's largest private sector bank, ICICI Bank has invested Rs250 crore in the Lavasa Corporation, a subsidiary of the construction major Hindustan Construction Company (HCC).

HCC informed the Bombay Stock Exchange (BSE), in a statement that the bank had made the investment in the form of convertible debentures.

Lavasa has in the past received investments using the same instrument from Axis Bank, Bank of India, Allahabad Bank, Indusind Bank, Andhra Bank and United Bank of India aggregating Rs600 crore. These banks have invested Rs225 crore, Rs150 crore, Rs100 crore, Rs50 crore, Rs25 crore and Rs50 crore in the project.

Lavasa Corporation Ltd is developing a hill township near Pune.

The last investment had been made in July 2009 by IndusInd Bank which pumped in Rs50 crore at a valuation of Rs10,000 crore Convertible debentures are debt instruments convertible into some other security, usually equity shares.

The banks may consider converting these instruments at a future date to get the upsides with Lavasa expected to go for a public offering in the second or third quarter of the next financial year. The project, which is expected to be operational by December 2010 has other promoters like Venkateshwara Hatcheries and Gautam Thapar's Avantha Group on board.

The Lavasa project is a township project located between Mumbai and Pune. The site is a three hours drive from Mumbai and an hour's drive from Pune. It is being developed over a 12,500 acre area and besides residential blocks it will house business, educational and recreational facilities.

The project has in the past had tie-ups with Accor, ITC and Apollo Hospitals for development of their facilities in the township. It also has a tie-up with Oxford University for development of SpaceWorld, a 65-acre edutainment park powered by US-based National Aeronautics and Space Administration (NASA).