FMCG company Emami has decided to float a wholly owned subsidiary to make a foray into the real estate sector.

A company official said that Emami had identified realty as a major opportunity, which would also help in mitigating the risks of the FMCG business.

Sources said that with liquidity in excess of Rs 100 crore, the company was well poised to enter the sector. The subsidiary would be formed by the end of March or April, the official said, adding that it would take up select projects where the returns were high and quick. The official said that the subsidiary would take up projects like IT park, shopping mall and residential complexes and these would have an estimated payback period of three years.

Besides the real estate business, Emami is also looking at inorganic growth through acquisitions in India and abroad. The official said that funds are currently parked in interest-generating assets till identification of appropriate opportunities. On the FMCG business front, Emami has registered a compounded average growth rate (CAGR) of 15 per cent for the last three years.

The official said that Enami has decided to invest heavily in brands.

The company has already invested over Rs 120 crore and has roped in some of the leading Bollywood film stars for endorsements. The international business of the company is growing at an annual rate of 40 per cent.

Source: Business - Standard