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.