GoAir to foray into real estate biz
Mumbai-based budget carrier GoAir could venture into the real estate business much like other Wadia Group companies. GoAir's land bank could not be ascertained immediately and the company declined to comment on the report. However, the decision to commence business in the real estate sector was taken by the airline's board of directors at an extraordinary general meeting or EGM held on December 4, according to filings with the Registrar of Companies.
GoAir is headed by Jeh Wadia, who is also the managing director of Bombay Dyeing.
"The consent of the company is hereby accorded to carry on the business activities as stated in the Clause 166 to 171 under Other Objects (Part C) of the Memorandum of Association," a copy of the resolutions passed at the GoAir EGM held on Dec 4 stated.
The said clauses, which allow Go Airlines to enter the real estate business, were inserted into the company's Memorandum of Association on May 3, 2012.
The biscuit to aviation Wadia Group, headed by chairman Nusli Wadia, ventured into real estate in 2011 with the formation of Bombay Realty, a 100% owned subsidiary of Bombay Dyeing and a company that has a land bank of 70 acres in Mumbai. The group's companies and trusts combined have a land bank of 10,000 acres across India, of which 700 acres is in Mumbai. The group now plans to monetise these land assets.
"Markets rarely value land banks and instead tend to focus on near-term earnings, cash flow metrics," said JP Morgan analysts Saurabh Kumar and Gunjan Prithyani in a research note released in June 2012. "We think over time as Bombay Dyeing develops joint ventures and joint development agreements with group companies, the market may take notice of these land parcels."