Sahara looks to build reputation and brand with realty public offer

Sahara looks to build reputation and brand with realty public offer
The Economic Times, November 21, 2009, Page 1

Abhinaba Das & Kausik Datta MUMBAI

THE forthcoming IPO of the Sahara group’s real estate arm will hopefully help change public perceptions about the group and make it more transparent, Sushanto Roy, the eldest son of group chairman Subrata Roy, said on Friday.

“The Sahara group is seen as a business house that is non-transparent. We are seen to be too closely held. It’s time we show to people that we have nothing to hide,” Mr Roy, who heads the real estate and infrastructure business, toldETin an interview.

In the future, the real estate business will be the group’s flagship as its current mainstay, an activity commonly referred to as parabanking, is in the process of being wound up. Sahara India Financial Corporation (SIFC), the group’s flagship, accepts fixed deposits from the public and invests the money in government bonds and other approved securities.

But the Reserve Bank of India (RBI) has instructed the group to stop accepting any new deposits maturing beyond June 30, 2011. It has also asked Sahara not to accept installments of existing deposit accounts from that date. This would increase the importance of the real estate business. “We know that the listing of our real estate company will open us up to public scrutiny. This is a conscious decision and we are confident that this will take care of the perception issues,” he added.

Subrata Roy built the financial services to real estate empire virtually from scratch, beginning his journey in 1978 in Uttar Pradesh with a small deposit-taking venture. While his hard work and networking helped him build a $12-billion group with interests in a variety of sectors, it also helped generate suspicion about the group’s practices such as alleged lack of transparency and perceptions that it was close to politicians.

The group’s struggling aviation business had to be sold to Jet Airways in a transaction that generated acrimony and mistrust between the two.