REA Group takes a punt on Indian real estate with Elara acquisition

PHOTO: Housing.com

The company behind realestate.com.au is set to spend $71-99 million to take a controlling interest in Elara Technologies Pte Ltd, India’s fastest growing digital real estate business in terms of audience.

REA Group (ASX: REA) has already dipped its toes in the venture with a 13.5 per cent shareholding in the group that owns Housing.com, PropTiger.com and Makaan.com, but now it has entered a binding agreement to increase its interest.

Due diligence will still be necessary before Elara hands over the keys, but upon completion REA will hold five out of nine board seats and is expected to have a shareholding between 47.2 per cent and 61.1 per cent.

The agreement is in US dollars with a range between US$50-70 million, with US$34.5 million ($49 million) payable out of existing cash reserves and the balance to come from newly issued REA shares. The cash sum will pay for 50 per cent of Elara’s debt facility.