Anantraj-The Road Taken

Three years ago I had voiced my feelings about this corporate, when the stock traded at Rs 30 ex-split between the two owner brothers. The other entity became TARC. In all these two companies had about 1200-1500 acres of land parcels under their control. Mostly NCR.

What was different with Anantraj was it had some fixed assets in Manesar, Rai-Sonepat and in Panchkula which were neither getting sold nor getting utilised. A lot of capital had been invested here and it was pulling the corporate down.

Till

One of the three brothers who now run Anantraj had a stroke of brilliance. Why not take a move into building up Data Centers, in the process these 3 facilities could be utilised properly and house a data center each.

Initial, ambitions were small. Manesar was to be turned into a Data Center with a capacity of 3MW, which was then to be raised to 6MW. Initial response was good, the corporate found some support from the Government of Delhi and RailTel. Google joined in for a technical tie-up, a successful QIP of Rs 500 crore was made.

The major shift

Three years back Anantraj's capital had been locked into land parcels. But a 77 acre joint development with Birla Estates in Sector 63A Gurgaon, was quickly moved to selling off land assets that were not to be immediately developed. The market conditions changed, helping Anantraj liquidate land holdings at ever higher prices, from a bottom of Rs 60,000 per sq yard to the present nearly Rs 200,000 per sq yard. All debts from YesBank and IBHF were repaid, and briefly Anantraj became totally debt free.

The private placement and QIP came

The first equity placement was made to veteran investor Nemish Shah at roughly Rs 280 per share. This was soon followed by a QIP of Rs 500 crore to the World at large. Having successfully raised funds, non deal road shows were undertaken in Singapore, Boston and New York. The story seemed good and was well understood.

Where do we go from here?

Mr. Amit Sarin, the MD is on record having announced a plan to invest close to USD 1.2 bn into the data center business. Or roughly Rs 10,000 crore. The corporate will have inflows from the JMD agreement with Birla Estates next year onwards, the Anantraj share at Rs 1000 crore, simultaneoulsy the 40 story Ashok Tower in Sector 63A will bring in Rs 2000 crore or so. That still leave a large sum of money to be raised.

To put things in perspective

Here is a company with a market cap of Rs 25,000 crore, with further plans to invest Rs 10,000 crore. They will most likely need external funding, maybe equity funding through a large QIP somewhere in the future.

The interesting part

What do they intend to do. The 6MW Manesar data center will continue to be scaled up. First to 50MW and all three data centers will have a capacity closer to 200 MW by 2028. Considering that India's installed data center capacity will be roughly 2300 MW, we are looking at one entity with about 15 per cent of India's installed Data Center capacity.

More than developing the remaining land bank theory, I am more excited about the Data Centers. Apart from fund raising, I could expect an IPO from Anantraj Cloud by 2026-2027, a rather large one.

The Road Taken

The corporate focus has taken a dramatic leap from Real Estate to Data Centers. Both segments are crucial to Indias growth, growth of the tech services segment,residential properties and maintaining India's data inside Indian Data Entities. The road taken three years has made all the difference.

If the execution and market conditions remain good, this company has a long way to go into the future.