[Jai]

This article states the Diamond Tower will be 410m tall. Also reiterates the fact -hat the buildings have already been approved, and again gives the 2009 date.

New collective investment scheme awaits SEBI nod

Tuesday, 08 April , 2008, 08:28


Mumbai: Gujarat International Finance Tec city (GIFT) is planning to raise the equivalent of $ 2 billion (Rs 8,000 crore) through a ‘Collective Investment Scheme’, a fund-raising route little used since the ‘nineties.

(For Indian investors the collective investment scheme (CIS) would bring to mind the infamous ‘Own Your Goat’, ‘Own Your Teak Tree’ or ‘Golden Forest’ offers which promised outrageously high returns to investors over a ridiculously short period of time. Most of these schemes went under, burying the investors’ wealth forever).

GIFT, a joint venture of Gujarat Urban Development Company and IL&FS, has informally sounded out the Securities and Exchange Board of India (SEBI) on its CIS plan, said Ravi Parthasarathy, Executive Chairman, IL&FS. The regulator has now asked GIFT to file a formal request, he said.

A pre-CIS placement of $ 500 million, which will constitute the “cornerstone investment,” is also part of the plan.

After the goat and teak fiascos, SEBI was compelled to bring this investment animal under its wing.

The CIS was never banned; but it was brought under regulation in 1999. A CIS is an arrangement by which payments from investors are pooled together and utilised with a view to receiving profits, income, produce or property, says the SEBI Web site. Investors do not have day-to-day control over the management of such a scheme.

In the case of GIFT, some of the investors would receive property development rights. The CIS will sell two kinds of units -- Units A will relate to commercial projects that are viable; while units B will relate to commercially unviable projects (such as greening, landscaping) but give its holders property development rights, said Hari Sankaran, Managing Director, IL&FS.

“There is an economic rationale for this,” said Parthasarathy. “Wherever we put infrastructure, land prices go up, not just at a CAGR of 30-40 or 50 per cent, but three and four times.”

“Subscribers can even get to choose the buildings they want to develop,” he said. A trust formed by IL&FS and the Gujarat government will manage the CIS.

Financial services zone

GIFT is developing a 500-acre core world-class financial services zone at a cost of $ 16 billion. This core area will itself be part of a 27,000 acre city-township area located between Ahmedabad and Gandhinagar.

There will be 40 different projects within the 500-acre zone. GIFT itself would develop most of the basic common infrastructure.

According to Sankaran the Indian financial services sector will require 1 billion sq. ft of office space in 20 years’ time. GIFT which is being designed for workforce of 3 million has been benchmarked to international standards, he said.

This city would have the tallest buildings in the country, the tallest at 410 metres, with over 30 buildings over 250 metres in height. These buildings have been approved by the State Government already. By mid-2009, the buildings would come up, he said.