Nesco Sanctions ₹3,500 Cr Capex for Tower 2 Development at Mumbai IT Park
K N Mishra
01/Jul/2025

What’s covered under the Article:
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Nesco receives IOD from BMC and clears ₹3,500 crore capex for Tower 2 development in its IT Park project at Goregaon East, Mumbai
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Project to be executed over six years, with funding from internal accruals; subject to timely statutory clearances
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Board approval granted during June 30, 2025 meeting after assessing IOD terms and future development needs
In a significant development for Mumbai’s commercial real estate and the IT infrastructure segment, Nesco Limited has announced a major investment commitment for the expansion of its IT Park located at the Nesco Center in Goregaon (East), Mumbai. On June 30, 2025, the company disclosed that it has approved a capital expenditure (capex) of up to ₹3,500 crore for the development of Tower 2, marking a major milestone in its long-term infrastructure development strategy.
This decision follows the company’s earlier announcement dated 29 March 2025, where it informed the BSE and NSE about the receipt of an Intimation of Disapproval (IOD) from the Brihanmumbai Municipal Corporation (BMC) for the proposed Tower 2. The IOD, though titled as a disapproval, is a crucial procedural approval in Mumbai's construction landscape. It outlines the conditions under which construction may proceed and is typically issued before final plans are approved.
Nesco’s letter to the exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, emphasized that the capex plan would be subject to the receipt of all statutory approvals in a timely manner. The board of directors, after considering the terms and implications of the IOD and overall project feasibility, met on June 30, 2025, and cleared the funding plan.
The project cost of ₹3,500 crore is scheduled to be deployed over a span of six years. This investment underscores the company’s confidence in the continued demand for premium IT office space in Mumbai and marks a key step toward expanding its established IT Park infrastructure.
What makes this development notable is that Nesco plans to fund the entire capex through internal accruals, without seeking any significant external financing at this point. This not only reflects the company’s strong balance sheet position but also its cautious and self-reliant approach toward expansion.
Background of the Project and Regulatory Milestone
The Nesco IT Park has been a hub for major IT and corporate tenants, with Tower 1 already operational and contributing to the company's robust rental income stream. The addition of Tower 2 is aimed at scaling up the leasable area, further enhancing the center’s appeal to large technology and service firms seeking state-of-the-art commercial space in Mumbai’s suburban business corridor.
Receiving an IOD from BMC is one of the most important preliminary approvals in Mumbai’s urban development process. It reflects that the municipal corporation has reviewed the development proposal and has provided a list of conditions and amendments which must be fulfilled by the applicant (in this case, Nesco) before obtaining the final Commencement Certificate (CC). It ensures that the project will conform to building codes, urban planning regulations, environmental norms, and zoning laws.
Given that Tower 2 involves high capital deployment, the IOD's receipt and the board's approval together represent critical foundational steps. They also imply that Nesco is now positioned to proceed with further regulatory clearances, architectural detailing, tendering, and construction activities over the coming years.
Funding Strategy and Financial Strength
One of the most noteworthy aspects of this announcement is Nesco's plan to entirely fund the ₹3,500 crore capex from internal accruals. This signals two important things:
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The financial strength and liquidity of the company.
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Nesco’s low-dependence on debt, thereby keeping its balance sheet lean while focusing on high-quality asset creation.
The company has traditionally followed a conservative financial strategy, and this investment pattern is consistent with its approach to risk mitigation and capital efficiency.
Implications for Investors and Tenants
This capex announcement is expected to have long-term positive implications for:
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Investors, who can expect a stronger annuity income stream once Tower 2 becomes operational.
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Tenants, especially those in the technology and corporate sectors, who will gain access to grade-A office space in one of Mumbai’s key suburban commercial corridors.
The expanded infrastructure is likely to be accompanied by improvements in connectivity, amenities, and sustainable design, aligning with global office trends. In the coming years, this could elevate Nesco’s positioning among leading commercial real estate developers in India.
Regulatory and Governance Compliance
The disclosure was made under SEBI (LODR) Regulation 30, which mandates timely reporting of material events that may influence investor decisions. By informing the stock exchanges of the IOD and the subsequent capex approval, Nesco has adhered to the principles of transparency, accountability, and governance.
The board meeting during which the investment was approved was held on June 30, 2025, and lasted from 3:50 PM to 9:30 PM, highlighting the depth of discussions and planning undertaken.
Conclusion and Future Outlook
Nesco’s ₹3,500 crore capex plan for Tower 2 in its IT Park project signals a bold but calculated move in the commercial real estate and IT infrastructure space. With Mumbai continuing to be a preferred destination for tech and service firms, this investment ensures that Nesco remains ahead in terms of both capacity and quality offerings.
Assuming timely statutory approvals and efficient execution, Tower 2 could significantly enhance Nesco’s rental income, brand equity, and positioning in the premium IT infrastructure domain. Additionally, the self-funded model reflects robust internal financial controls and provides confidence to long-term investors.
The market will be closely watching how the project progresses through regulatory milestones and construction phases, with potential re-rating in the stock likely once project visibility increases.
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