Realty major Parsvnath Developers on Wednesday joined hands with Sabeer Bhatia, co-founder of Hotmail, to develop a 11,138 acres knowledge city near Chandigarh, where the company will initially invest Rs 400 crore (Rs 4 billion).
The project, Parsvnath Nano City, valued at Rs 50,000 crore ($12 billion), is promoted by the former Hotmail innovator Sabeer Bhatia, whose company holds the majority stake of 52 per cent. The Haryana government holds 10 per cent stake.
"We have already made an investment of Rs 41.5 crore (Rs 415 million) for acquiring 38 per cent stake and the remaining will be invested as debt in future," Parsvnath Developers chairman Pradeep Jain said in New Delhi.
To be developed in Panchkula, the project would be completed in two phases over the next 10 years, where the company would develop 5,000 acres in the first phase.
"We have already acquired about 1,500 acres and we are talking to various land owners for acquiring the rest," Jain said.
The realty firm would invest Rs 400 crore initially in the form of equity and debt in the project, he said.
All the stake holders of the project has formed a new entity, Nano City Haryana Ltd, which would raise funds from the capital market within 18-24 month for completing the project.
"We plan to take the company public in 18-24 months, but we have not finalised how much stake will be diluted or how much money we are going to raise," Jain said, adding the company would also dilute some stake to private equity investors.
The company, which is also relying on internal accruals to fund the project, is expecting the realisation to flow from the next financial year, he said.
Elaborating on the project, Jain said: "The knowledge city will be divided in four districts: IT, University, Airport and Biotech."
Residential area would constitute 30 per cent of the total city, while commercial area would be of 4 per cent area, he added.
"The project is expected to attract world-class companies involved in the creation of intellectual property. It will be the future hub for software development, nano science, drug discovery, bio-technology, energy and semiconductor research," Jain said.