ValuePickr Forum

Hemisphere Properties an Open Opportunity with Value

Company Details : Hemispher Properties Limited
Company was formed as part of the disinvestment exercise carried out by the Government of India in respect of its holdings in the erstwhile VSNL (currently known as Tata Communications Limited). In 2002, the Government of India conducted a disinvestment exercise in respect of 25% of its shareholding in the equity share capital of VSNL, wherein in terms of the bid for the disinvestment required a separate value to be ascribed to lands to be retained with VSNL and to exclude the value of certain surplus lands, held by VSNL. Panatone was the successful bidder in the disinvestment process and subsequently, entered into the VSNL SPA and the VSNL SHA. In terms of the disinvestment bid, the VSNL SHA and VSNL SPA, the surplus lands identified were required to be hived off or demerged into a separate entity. We currently own or have access to 739.69acres of land, transferred to our Company in terms of the Scheme of Arrangement. The Surplus Land has been transferred as a part of the overall scheme of disinvestment of the erstwhile Videsh Sanchar Nigam Limited. Upon completion of the transfer, the Company will seek to develop and/or transfer the Surplus Land in accordance with the policies of the Ministry of Housing and Urban Affairs and our management.
Area of Operations
The main object of HPIL is to acquire construct, hold, manage, develop, preserve and to deal in any other manner with the properties including sale and purchase thereof.

To collect and settle revenue, rental, lease charges and such other charges as may be payable by any entity against legitimate use of such property.
To carry out business of developing, holding, owing, leading or licensing real estate and property of all kinds for this purpose acquiring purchase or through lease license, barter and exchange hire or otherwise.
To carry out the business of building construction and development of commercial building, industrial shed, offices, house buildings, apartment, structures, hotels or other allied works of every description on any land acquired howsoever by the company whether on ownership basis or lease or licensee and to deal with such construction or developed or build premises by letting out, hiring or sale.
Current Managemet
D THARA
( Chairperson & Managing Director )
Amit Kataria
( Director )

Current Last Q 31 st March 2021

Review :

has announced that land parcels valued at Rs 19,000 crore can be monetised on current circle rate prices. An order of demerger issued by the Ministry of Corporate Affairs between Hemisphere Properties and Tata Communication Ltd mentioned that 739.69 acres of land were transferr…

Hemisphere Properties will possibly partner with Tata Construction and Tata Housing to develop these lands for mixed-use real estate, including shops, malls, and residential development. The Centre owns 26.12% shareholding, and the Tatas own an equivalent amount through Pantone Investments.

Hemisphere Properties: The talk of the town
The surplus land of Tata Communication made way for a new entity known as Hemisphere Properties, which got listed last year. Here’s all you need to know about it.
By Rajan Gulati
New!

Articles from https://www.valueresearchonline.com/stories/49203/hemisphere-properties-the-talk-of-the-town/
Hemisphere Properties: The talk of the town
But first, a little history
The company was conceptualised during the disinvestment exercise of VSNL (later known as Tata Communications) back in 2002 by the government. Naturally, the terms of the disinvestment required a separate value to be ascribed to lands which were going to be retained with VSNL and subsequently demerged into a separate entity. Panatone, a Tata group company, won the disinvestment bid. However, the fate of Hemisphere Properties was left in doldrums for a long time after that. This was primarily due to the burden of a capital gains tax on the shoulders of the Tata Group that they were to pay upon transferring the surplus land to Hemisphere Properties. Back in the day, the benefit of tax neutrality was not applicable to the companies which ceased to belong to the public sector as a result of
Finally, in 2016-17, the tax laws changed, the scheme of demerger got approved, and in October 2020, the company got listed. The existing shareholders of Tata Communications suddenly saw Hemisphere Properties shares in their demat and were left wondering what it was that the company did exactly? And whether to sell those shares, or, buy more?
The business side of things
Well, we could go on and on about the business aspects of this company but there’s just one little problem. As of today, it doesn’t really do anything. However, it does have land parcels of around 740 acre across four major cities - Delhi (Greater Kailash: 69.46 acre, Chattarpur: 58 acre), Pune (524 acre), Chennai (53.04 acre) and Kolkata (35.19 acre). The company also has an in-principle approval of Rs 751 crore from the Ministry of Finance for the payment of stamp duty on transfer of title of its lands. While a sum of Rs 700 crore is to be infused in the form of equity, the rest will come as loan at a 10 per cent interest rate. Currently, the company is in the process of taking possession of various land parcels and intends to either develop them going forward or carry out an outright sale.

Current latest update company is hiring an

There can be some moment in this Quarter hope fully.

I will keep updating if some thing comes in the research.

Disc: Invested

2 Likes

Land reserve Details

Technical Positional Pick - 12-07-21-HEMIPROP.pdf (881.2 KB)

Please find the attached Research report released by HDFC Securities.

RISK FACTOR TO BE CONSIDER:

The company is led by Govt staff and the aim is to monetize land.

The company has following liability
(a) Rs 750 cr advance by GoI towards change in title of land from erstwhile owners (Tata Comm, VSNL etc) to new entity

It could potentially have another liability in terms of charges for change of land use as current land use is not for residential/commercial development for some of the parcels. I am not aware how much this charge would be but it could be substantial and would have to be funded either by loan/advance from GoI or from other means.The mode of funding would have to be clarified.

The land could be sold to a buyer or exploited through a JV led development model.
Further, as the land parcels are large for the areas where they are located, it is not clear if it will have to be sold off in chunks/ exploited piece-meal or in stages. A lot of these are open areas and would have impact on the value of the land assets in terms of valuation and timelines of cash flow into company.

The cash flow from sale of land would invite LTCG and from monetization of land parcel through JV could invite other forms of taxation. Further, distribution of proceeds would invite taxation if through dividend/buyback route.

A major concern here is that future re-rating will play out entirely on how the co. plans to monetize the land bank. If they straight away start selling and distributing the surplus, the re-rating will come sooner and ur IRR becomes acceptable. In case they get into development and leasing, then that will take atleast 3-5 yrs to play out.

Another risk is that the entire land holdings are not unencumbered and there are pending litigations on some parcels.

2 Likes

Considering on July 8 th they release an Opening for Valuing there properties.

Per my understanding on 8th July they have an opening for a Valuation of the company and per rules they have to submit the reports with in 30 days, they issued as a tender, You can find in this blog or the company website , I am thinking the monetization is already done for some palaces and some are pending, Hope to see the Land monetization report this Quarter or a complete report in next Quarter.
They hired professional people for this project, Company is in the safe hands as Even TATA Group is also involved , No corporate leaders or any high political people are involved so I feel there is no risk , Value is still open , 20000 Crores Value you are getting in 4000 Crores for instance the valuation are below these the stock can be double triple from here. CMP 152 Hope to see around 500 once the valuation are out, Every one will cover this story , Best thing is all lands are in the city.

Risk : Could be delay because of work or Covid 3rd wave, But I see the are working on it, CEO is an IAS and good work history.

4 Likes

Three risk factor underlying is that :

  1. Some lands are under litigation and litigations in India go on for long.

2.The land parcel in Pune is huge (approx 524 acre of the total of 740 acre), 70 % of which is adjacent to the Defence establishment. This leads to a serious question that whether or not the company will be able to realize that land.
3.Encroachment of land is another serious issue as before the new management , the land was just left anattended.

So, in my opinion, there is still a long way to go and it depends on the management and also defence ministry, if the total value of 20000 Cr will be realized.

One more thing I would like to add is : their Chairperson and MD - D Thara. She is Joint Secretary in Ministry of Housing & Urban Affairs. So, I think that more political affiliation is there in the company. To add on to it, they have added one more person to the board (a recent appointment) who is also the member of Ministry of Housing & Urban Affairs. D Thara is impressive and dynamic, but can be a double edged sword.

2 Likes
4 Likes

Hemisphere Properties stock can double your money in two years.

( Hemisphere Properties stock can double your money in two years - The Sunday Guardian Live )

  • July 17, 2021,
  • 8:36 pm
  • Updated
  • July 17, 2021,
  • 8:36 PM

Hemisphere Properties India Limited was incorporated in 2005 as a real estate company and became a Government of India enterprise after acquisition of majority equity shares by the President of India. The company was incorporated pursuant to the Share Purchase and Shareholders Agreement executed in the year 2002 between the Government of India and Panatone Finvest Limited and Tata Group of companies. It was agreed wherein the surplus land identified at the time of disinvestment of Videsh Sanchar Nigam Limited (VSNL) was to be demerged into the Company. Later, VSNL became Tata Communications Limited and for the land which was demerged, a scheme of Arrangement and Reconstruction was filed with the National Company Law Tribunal between Tata Communications Limited and Hemisphere Properties India Limited. The Scheme was approved by the National Company Law Tribunal in 2018. The approved scheme of arrangement and reconstruction, upon the scheme becoming effective, all the assets and liabilities pertaining to the surplus land got transferred and vested in the Transferee Company at their respective book values as appearing in the books of transferor Company. Therefore, the value of the land has been taken as the book value of the land in the audited balance sheet of Tata Communications Limited for the FY 2019-20 wherein the value of the land has been done only as per the final approval of scheme of arrangement and reconstruction. The company pursuant to the order of demerger passed by NCLT and MCA has a land parcel of 739.69 acres and is presently listed on the stock exchanges. Hemisphere Properties India Ltd holds land parcels comprising of 739.69 acres at different locations—524 acres in Pune, 35.19 acres in Kolkata, 53.04 acres in Chennai, 58 acres in Chattarpur in New Delhi and 69.46 acres in Greater Kailash, New Delhi.
The company had conducted due diligence of land parcels a few years back under the administrative control of Department of Telecommunications wherein the value of land parcels was calculated at Rs 9,55,864 lakh. Due to Covid-19 restrictions and immense area of land parcels, the fair value of land parcels could not be calculated during the current period but now the company management has initiated the process of calculation of fair value of land parcels located in Chennai, Pune, Kolkata, Chattarpur and Greater Kailash in New Delhi.
Analysts tracking the company expect the current value of land parcels in prime areas to be substantially higher than what they were valued at a few years ago. The government being a custodian of these land parcels will ultimately sell these off in due course of time to realise the immense property values. The stock price of Hemisphere Properties India Ltd currently quoting at Rs 152 on the bourses can be a multibagger opportunity for investors. Long term investors with a two-year time frame can easily double their money by purchasing the Hemisphere Properties stock for smart gains.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent

1 Like

Most of the times many have questioned on the land near Pune Defense area , they cannot construct and build or there are many litigation and approvals are needed. Below is the answer them on a positive way. The policy will be sweeping change in defence land policy.

India set to introduce sweeping changes in defence land policy for the first time in 250 years

The new rules come ahead of a series of defence land reforms that is under consideration of the government, which is also working towards finalising a Cantonment Bill 2020, aiming to provide for development in special zones - considered virtually sacrosanct till now

An Indian army vehicle leaves the Sunjuwan camp in Jammu on February 12, 2018 (Representative image: Reuters/Mukesh Gupta)

A policy on tinkering with defence land in India for any purpose other than the military has been a strict no-no since the British set up the first cantonment in Bengal’s Barrackpore in 1765, shortly after beginning the process of consolidating their rule in the sub-continent.

In April 1801, the East India Company’s Governor General-in-Council ordered: “No bungalows and Quarters at any of the Cantonments shall be allowed to be sold or occupied by any person who does not belong to the Army”.

What was supposedly then cast in stone may now be recast in 2021.

EVI development

The Narendra Modi government has approved new rules that allow equal value infrastructure (EVI) development for armed forces in lieu of the land procured from them.

The new rules come ahead of a series of defence land reforms that is under consideration of the government, which is also working towards finalising a Cantonment Bill 2020, aiming to provide for development in cantonment zones, considered virtually sacrosanct till now.

According to Ministry of Defence (MoD) officials, who spoke on the condition of anonymity, defence land needed for major public projects – like building of metro, roads, railways, and flyovers – could only be exchanged for land of equivalent value, or after payment of market prices.

Under the new rules, eight EVI projects have been identified, which the acquiring party can provide infrastructure for in coordination with the concerned Service.

They include building units and roads, among other projects. According to the new regulations, the value of land would be determined by a committee headed by the local military authority – in cases under cantonment zones.

For land outside cantonments, the district magistrate will decide on the rate.

Connected moves

There are connected moves on the governmental chessboard as well. The Ministry of Finance (MoF) has pegged monetising defence land as the only way to generate revenue for the proposed non-lapsable modernisation fund.

According to officials, a draft cabinet note on setting up the defence modernisation fund is currently undergoing inter-ministerial consultations, and a final decision is expected soon, following which it will be placed before the Union cabinet for approval.

Says Lt Gen HS Panag (Retd): ``Since defence lands are in the most prime areas all over the country, over the years, politicians and civic officials have demanded that they be used for undertaking developmental activities. Now it seems, it is happening.”

All along the GT Road - from Delhi to Peshawar for instance – there are camping grounds and old depots that are not in use any longer, built by the British Indian Army during the Second World War when troops had to be moved from one place to the other.

"You can monetise the land if the army is not using it and provided, they are given alternate land,” Panag told Moneycontrol.

But in his reckoning, the estimated money that the government may earn from monetisation of land would barely suffice.

The Department of Military Affairs (DMA), headed by Chief of Defence Staff (CDS) Gen. Bipin Rawat, had told the government last year that proceeds from defence land monetisation would be hardly adequate to meet the armed forces’ requirements.

Inadequate capital budget

The DMA had also highlighted that the capital budget of the defence forces is inadequate to meet their committed liabilities and objected to 50 per cent of the funds from defence land monetisation going to the Consolidated Fund of India, as the Ministry of Finance has suggested.

Most agree that it was only a question of time before the defence sector – the biggest landowner in India – would face acquisition issues.

Politicians and developers have long waited to transform the lush green expanse of endless defence land into glass-and-concrete boom towns.

In 1991, the then Defence Minister Sharad Pawar was the first to moot the idea of abolishing cantonments, “these remnants of a colonial past” so that “excess land” could be utilised.

Given the outrage that followed, however, he tempered the statement saying that cantonments will not be scrapped.

According to the Directorate General Defence Estates, the MoD has about 17.95 lakh acres of which about 16.35 lakh acres are outside the 62 cantonments in the country.

This, mind you, does not include lands with the public sector units (PSUs) under the MoD, including Hindustan Aeronautics Ltd, Bharat Electronics Ltd, Bharat Dynamic Ltd, Bharat Earth Movers Ltd. Garden Reach Workshops Kolkata and Mazagon Docks Mumbai, among others and the vast Border Roads Organization, which has constructed over 50,000 km of roads.

There are substantial military lands outside the Cantonments. Camping grounds, abandoned cantonments, ranges, and even discarded airfields of Second World War vintage constitute defence lands, which according to one estimate totals land area of up to five Delhis – old, new and rural areas - put together!

Prime property

From the famous sprawling maidan in front of Victoria Memorial in Kolkata to the huge Delhi Cantonment and Navy Nagar in tony South Mumbai; hill stations like Dalhousie, Lansdowne, Kasauli and the Nilgiris– to name just a few - are owned by the Ministry of Defence and its allied organizations.

In a country where land is extremely scarce, it is tempting for political parties to encroach upon’ or use’ defence land for developmental purposes.

Added to the huge land holdings, the armed forces also have veto powers on land sale or construction activities near their stations on grounds of security.

To be sure, however, the concept of a non-lapsable defence modernisation fund is not new.

In the interim Budget of 2003-2004, the then Union finance minister Jaswant Singh had announced such a fund of Rs 25,000 crore, which would be made available to the MoD. However, in the subsequent years, the finance ministry had repeatedly objected to setting up the fund.

The fund has now been recommended again by the 15th Finance Commission, which made its report public on February 1 this year.

The same month, Finance Minister Nirmala Sitharaman said her ministry had agreed in-principle to the fund. “The modalities and the structure will be worked upon,” Sitharaman told the Lok Sabha.

Others, like Lt Gen Satish Dua (Retd) believe that surplus defence land can be monetised for modernisation of the armed forces. ``The capital generated should form a non-lapsable kitty for modernisation only (not revenue expenditure). A firm recommendation to this effect has been made to the 16th Finance Commission,” he told Moneycontrol.

Dua, however, points out that monetisation of land under use in cantonments is not being suggested. ``Only the land which the Army is forced to accept in some unviable location as barter, may as well be monetised,” he said.

Civilian glasnost

The point to be seen is how this civilian glasnost pans out. As of today, military cantonment and lands are governed by a special 1924 Act and they have their own laws and administration, independent of civilian municipalities. Will these unique powers remain or is this fine distinction going to blur?

Officials do admit that encroachment of defence land is a major issue. Between 2017-2020, over 55 acres of encroachments or unauthorised constructions were detected on defence land.

In a country like India with a burgeoning population and the demands of urban living weighing heavily on civic planners, the old consideration of keeping defence areas away from civilian habitats, also seems to be breaking down.

A former Chief of Army Staff told Moneycontrol on conditions of anonymity that every country has exclusive defence lands, which is beyond the purview of civilian administration.

Analyst Pravin Sawhney, who retired after 14 years as an officer in the Indian Army and now edits *Force,*a news magazine on Indian defence, believes the new defence land use plans are in consonance with the whole idea of aatmanirbhar (self-reliant) India.

The British were keen to keep the military away from the civilian population, hence their planning was based on those lines. This government wants a peoples’ army, where the military lives in proximity with the local populace,” he told *Moneycontrol.* The Directorate General Defence Estates, the ultimate arbiter of defence land in India, notes: Lord Clive initiated the policy of setting up exclusive habitats for the company’s forces, slightly away from the then urban areas…He wished to keep interaction between the Englishmen and local population very limited, in the interest of discipline.’’

That policy, clearly, is going to be turned on its head.

5 Likes

Just while going through the PDF released for tender, On or before 28 July at 3:PM we might the candidate who will value the land, A clear progress , Lets hope for the best!!! and per rule and agreement , they have to submit the report with in 30 days that to whole lands size.

4 Likes

@Kailasa_Tiwari sir, thank you so much for tracking the stock.Can you please share pdf regarding land valuation. Thank you

1 Like

Hi Karthik- Valuation are not yet done, Company has released Tender for Appointment, Final submition date was 24th July and Result will be 28th, and any Appoinment done will have to submit the land value within 30 days.

Disc : Invested

Risk : Delay of Govt work only thing but value still stand.

2 Likes

Absolutely spot on.

Most real estate companies are trading several times their landbank/bookvalue and here this is going for a song.

2 Likes

Tender-for-Registered-Valuer-Final.pdf (655.5 KB)

Attached is the Tender details! Any questions please share + any of your inputs are welcome will be a great learning for us and for everyone!

1 Like

they say that most of their lands have been encorached.
Given how our Sarkaari system in the country works, it is anyone’s guess when the land can be freed of encroachments and used for developments…

i feel this will be more of a value trap.

while there is a value in the land bank, u cannot do anything with that land - neither sell, nor develop !

I would have agreed with you if TATA as a promoter was not Involved. If you See the Management , CEO is an IAS and Earlier munciple commissinor in gujrath and some other officers from the land devlopment history.

No know what will happen but weightage seen to be on the good side.

Mr Sanjay Bakshi a ACE investor frok Delhi, he might know the value of land in Greater Kailash and other aswell. He has bought a good percentage of the portfolio he handles.

Risk but worth!

2 Likes

HPIL/VALUATION/LAND/2021-22
With reference to tender dated 08.07.2021 for NOTICE INVITING BIDS
FORAPPOINTMENT OF GOVT. REGISTERED VALUER(S) FOR VALUATION OF
ASSETS is issued to the following extent:
1The below criteria is read as addition in Eligibility Criteria:
The bidder should be mandatorily registered with Principal Commissioner Income Tax
Department, under Section 34AB of Wealth Tax Act, 1957 Read with Rules.
(Attach-Copyof Registration))
General
Applicable Exemption to Valuer/Bidder registered under MSME (attach copy of
registration)
Last date and Time for Submission of quotation is extended and will close on August
16,2021 upto 3.00 pm Due date of Opening of Technical Bid is extended and shall be opened August 18, 2021
at 11.30 AM
11
111
Bidder(s) who already submitted documents can send a copy of above documents on or
before opening of the tender.
All other terms and conditions remain unchanged.
Diwakar Kumar Barnwal
Director

We have to wait little longer for the bidders till 18 August 2021 as new rules are been shared.

2 Likes

I hope fully think quotation has been submitted for valuer of the land. Figure crossed , Hope this time there is no extension watch the results on 18th Aug 11:30.

1 Like