Unitech to raise $300m through Realty Fund

Q: There are separate talks in the market that Unitech has a problem with raising money. Are some of the people, who have invested in some kind of debt instruments, calling their money?

A: There are more rumours than reality happening in the market on our sector. That is something that the regulators should also address in the market. We are seeing some systematic rumour generation happening, particularly in the real estate sector focusing on a few of the larger players.

We are well capitalised and have been able to raise substantial amounts of international capital in this market also. We have finished all the financial closures of our transaction with Lehman.

Three days ago, there was a buzz in the market that the deal was cancelled. But we have just informed the stock exchange that we have received approximately Rs 740 crore of money in our hand. Till yesterday, there was a rumour that that deal is cancelled. So, there are lot of non-real things being heard around. But the companies that do have a track record; land bought at the right price at the right time, are well poised to take advantage of the situation and grow far better than the others.

Q: Two of your peers in the north Indian markets have announced fairly ambitious projects. Do you think that given the current market situation and when the rates are softening, these projects are viable?

A: I am not sure about the project viabilities of the peers. We are more cautious on land acquisitions but there are still some good deals available. About seven-eight months ago, everyone wanted to buy the same piece of land. So, it was driving up the acquisition price.

We were actually stepping away from a lot of transactions. Today, we are at a position where we feel we will be able to have an edge in land acquisition. We will still look at deals where we make extraordinary amounts of money and those will be available in the market.   

Q: Another charge raised by some brokerages is that there is some execution risk to some of your projects in Chennai and Hyderabad and they have gotten delayed because of government approvals. Has your timetable been put back by a couple of months or so?

A: Chennai and Hyderabad were relatively new markets for us. So, there were some initial delays. But we are starting construction on both the markets shortly. We hope to still be within the timelines, which we were looking at by just accelerating the construction.

Fortunately, today the construction space is pretty good. We have a lot of large contractors working for us today. So, we will be able to tackle that easily.

Q: What kind of softening do you see in the real estate price situation in the National Capital Region (NCR) and Mumbai city and suburbs?

A: NCR, in the last three months, has been better than the same time last year for us. We have had extraordinary sales as well as prices. We innovatively reduced the ticket sizes of the properties, which we were launching to a more affordable size. So, we started with 900 and 1,000 square feet apartments in NCR, which were not prevalent. There was a project, which we launched about a week ago and our annual target was 200-apartments and we have achieved over 250 in less than ten days.

Q: Have you finalized your telecom partner yet?

A: We hope to finalize and make announcements to that effect within the next one-month. There is a lot of movement on that. We have shortlisted a few and are going through the final rounds of due diligence and negotiations.