Ansal Properties hopes gross debt drops by Rs 300cr in FY12

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In an interview on CNBC-TV18, Dinesh Gupta the COO of Ansal Properties talks about his guidance for FY12. He outlines how his company plans on reducing its gross debt in this fiscal as well the possible launch of future projects in the country.

Below is a verbatim transcript of his interview with CNBC-TV18's Reema Tendulkar and Ekta Batra. Watch the accompanying video for more.

Q: You have already sold 9 million square feet and in Q2. Is that along your guidance or is it above or below? What do you expect to close FY12 with?

A: The official guidance through your channel was given at about 16-18 million square feet. We have sold about 9 million square feet across our townships in Q1FY12. On a timeline basis we are definitely above the guidance. We are going to absorb the ups and downs during the year. We should be able to meet our targets and chances are that we are going to overshoot the guidance that we have given. For now, we are maintaining the same guidance about 16-18 million square feet for FY12.

Q: You also indicated collections of close to about Rs 2,000 crore in this fiscal year. Is there likelihood that you would overshoot that as well and how much would it stand at?

A: We are bang on target as of today. We have been collecting almost Rs 150-160 crore a month which should give us a target of about Rs 1,800 crore along with the private equity infusions that have already been closed and transactions which need financial closure during the year.

We are looking at Rs 2,000 crore and are looking at the festive season, October to December, which is Q3 for FY12 to be a good season. Once we reach there we should be able to give you a better guidance for the full year. For now, Rs 2,000 crore seems to be inline and we should be hitting that very comfortably.

Q: Where are you seeing maximum sales happening? Where is the price hike being absorbed most easily at this point in time? In terms of future projects, where would you look to possibly launch these projects?

A: We are primarily a township developer panning across north India including four states which is Uttar Pradesh, Rajasthan, Haryana and Punjab and along with the NCR region which covers Gurgaon, Ghaziabad, Greater Noida, Meerut and Kundli which is on the NH1 belt. We have been clocking sales in these areas and we have seen robust demand, especially, on the built-up houses and on the plotted developments which has been our primary business.

Now as the townships are maturing, we are moving into the built-up spaces, more into low rise apartments or even high rise apartments. For example, in Lucknow, we have the largest township spread over 3,500 acres. We have gone ahead and launched luxury apartments which are golf facing and have the luxury of golf view and other amenities. Those are now being absorbed in the market.

Though Gurgaon in the past has seen a price surge, we are looking at selling our products in the same territory for a higher realization which has been our reason for the increase in realization from Rs 1,000 a square foot to close to about Rs 1,400 a square foot.

Nevertheless, since these townships have just more than plot built-up areas, we are selling as a master developer for FSI sales to local developers who are interested in developing these townships or looking at commercial developments or even apartments development. Those sales are also picking up and we continue to do that across our townships especially in the NCR region because 40% of our land bank still remains in NCR which is still very focused on pricing and there the absorption remains intact.

Q: It's not a great time to be sitting on a gross debt of close to Rs 1,500 odd crore. You have plans for monetizing some of your projects. When will the first of the monetization come on-stream and how much will you raise?

A: The company is in process of monetizing these assets. The talks have been going on for quite sometime and take time. In the next 15 days, we should be able to come out with the first announcement on one of the monetization which is in the last leg of negotiation and finalization of the documents.

Give us some time and I am sure we'll be able to give positive news to the market in the form of asset monetization followed by some more monetization which is in the pipeline. That would take about 60-90 days before we can make it public and share the news.

Q: What is the target with respect to reducing your debt situation? Where does it stand and how much do you want to reduce it by?

A: At the beginning of FY12, we started at Rs 1,570 crore and we had given a guidance of reduction of Rs 300 crore during the year. In the first four months we had already reduced about a Rs 100 crore of gross debt and during the month also we have been reducing though I don't have the final number. On a month-on-month basis, we should be looking at reducing the gross debt as the repayments come and we are able to use our operational cash flows for reducing the debt.

By the end of FY12 we are positive and hopeful that we reduce our gross debt by about Rs 300 crore which would put us close to about Rs 1,250 crore at the end of FY12.

Q: Give us more details regarding this monetization? Are you referring to a private equity investor entering into one project or would it be multiple projects? What we can expect?

A: The monetization is not through private equity participation. What we are looking at is monetizing through either our existing joint venture partners or looking at a third party developer who is locally placed. I have more interest in the local area. We are in Delhi and there may be a project which is about 500 kilometers away from our domain.

For the local developer it makes sense for him to concentrate there. We are not looking at private equity players for divesting but we are only looking at private equity players to participate in the existing projects where we need to ramp-up and concentrate our energies and our development focus more so because we have done a lot of sales plus development will give us more benefits in these areas in the short-run as well.