January 30, 2010 : Real estate company Vatika Group plans to raise up to Rs 1,000 crore from an initial public offering (IPO) in May by selling around 20% stake, joining a parade of developers looking to wriggle out of the slowdown-induced IPO drought.

The company will file its draft red-herring prospectus (DRHP) with market regulator the Securities and Exchange Board of India (Sebi) in a month, said two persons familiar with the matter. Investment bankers Morgan Stanley and IDFC-SSKI are estimating the valuation and preparing the DRHP, said the first person.

The Indian real estate sector was among the biggest casualties of the global downturn as buyers kept away from the market and banks became skittish about lending. But with recovery gathering pace and the stock market bouncing back, scores of realty firms are taking the IPO route to mop up funds for expansion plans as buyers are slowly returning.

Vatika joins at least 40 firms, including big names such as Emaar MGF, Lodha Developers and Sahara Prime City, awaiting Sebi's approval to tap the market. "The IPO market had dried up last year following the financial meltdown. But with the recovery in the stock market, it is natural for real estate firms to tap the IPO route," said Jagannadham Thunuguntla, equity head with Delhi-based merchant bank SMC Capitals.

Vatika has been looking to raise funds for some time to fund several upcoming projects, including commercial complexes, corporate offices, residential projects and hotels in cities stretching from Gurgaon to Jaipur