Pune project phase I financial closure reached: Kolte Patil

Real estate player Kolte Patil Developers is a construction group in Pune which offers residential projects, IT Parks and commercial projects of apartments, bungalows etc. 

Sujay Kalale, the VP business development of the firm, in an interview on CNBC-TV18 spoke about the huge jump in the stock price of the company and the reasons behind it.

Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh. For complete details watch the accompanying video.

Q: Is there any recent material development in terms of some funds tied up with the ICICI ventures or with any other bank that has lent so much wings to your stock?

A: Yes, there is significant development on all the three projects that we have with ICICI Ventures. All of them are flagship projects as far as the group goes. One of the projects is a 400 acre integrated township development, where we are close to launching in June.

The total project size is around 15 million square feet, out of which the first phase of 3 million odd square feet we have achieved financial closure. So, that maybe part of the reason. We have also seen strong sales in the last quarter or so. Obviously it will take some time to get reflected in the balance sheet and the P&A.

Q: When did this financial closure for the first phase of the project happen and what kind of sales have you managed in that first phase?

A: We managed to achieve the financial closure around three weeks back. Out of the first phase of 3 million square feet, we have managed to sell around 0.7 million square feet. The project is scheduled to go live in the first week of April where the construction will come in.

Q: Can you tell us what the project investment is, because the figure that we have is of almost Rs 3000 crore. Is that correct? If yes, how much is Kolte Patil and ICICI Ventures putting in individually? Can you give us a breakup?

A: Divide the total investment, as in the investment in land and investment in construction, the total investment in land for both the parties put together is close to around Rs 340 crore, which is already gone in. The land is tied up and we have received majority of the regulatory approvals for the first phase of 3 million sq. feet.

The total development size is around 15 million square feet and the total investment of around Rs 3,000 crore is to be phased out over six years on a conservative basis. As far as the first phase of 3 million square feet goes, we require a total investment of around Rs 600 crore, out of which as a company policy, we take 20% and 80% is internal accrual. For that 20% debt is already tied up and out of the Rs 500 crore odd which we require to generate from internal accruals, we have tied up sales worth around Rs 225 crore.

Q: What is the debt currently in terms of an absolute figure and what are the cash on books?

A: Total debt on a consolidated basis is around Rs 40-45 crore at a group level and the total cash on balance sheet is around Rs 38 crore.

Q: This Rs 500 crore that you have to put in by equity, are you saying you are generating it largely by pre-sales?

A: Internally, yes, that is right.

Q: What is the rate at which you are able to sell the land?

A: No, it is the residential product that we are selling. Today, we are selling at an average price of around between Rs 3,200- Rs 3,400 a square feet for this particular project.

Q: When do you get revenues from this first phase?

A: We have already got part of the revenues but we don't recognize it till we complete 20% of the construction. The revenues will start reflecting from the first quarter of next financial year.

Q: In Q3, you did about Rs 30 crore in terms of total revenue. For the revenue stream in FY12, what kind of a run-rate do you think you can maintain in the next couple of quarters?

A: Post the recession, most of the projects which were on the drawing board, we have managed to get the approvals to launch them in the last four months. We have sold around 1,100 apartments across group level projects across all the projects put together including this project. We hope to launch another 6 million odd square feet projects in the next six months. I can't give an absolute number right now, but the numbers would be very aggressive.

Q: How much of a growth rate are you expecting, revenues and profit?

A: We hope to double our revenue for the next financial year.

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