Real estate biz to contribute 75% in 4-5 yrs: KSL & Ind

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Real estate biz to contribute 75% in 4-5 yrs: KSL & Ind

Citigroup Global Markets picked up 2.3% stake in KSL & Industries. Discussing the company's business, Saurabh Tayal, Chairman of KSL & Industries says, currently most of the company's revenues and profits come from its textile business.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Real estate is really booming Will real estate IPOs get good response from investors? ALSO READ See latest News about KSL & Ind See previous management interviews See what other Experts & Brokerages are saying about KSL & Ind BSE | NSE 01/01/70 Are Mutual Funds betting on ?

Q: What is the current breakup between textiles and real estate as a contribution to your revenues? How is that going to shift and are you going to demerge textiles or leave it with the entity?

A: Today the revenues, profits, etc are from textile business because the real estate business is still under construction. But once the real estate construction activities start, a lot of rental income will start coming in from it.

Apart from that, a large number of profits will also come in from the sales of the residential apartments. So when the company becomes very strong, then later on the board may probably consider either a demerging or something of the same sort for the textile business.

Q: Currently, is it a 50-50% breakup or textile is 80%, land real estate is less. How does it add up in your financials?

A: Today most of the revenues and profits are from our textiles business, but going forward, in the next four-five years, the balancesheet will show almost 75% of the company as a real estate company and 25% as a textile company.

Q: Which of your projects is currently underway and which one do you expect to complete maybe within one year or 18 months?

A: We have already started in Nagpur, which is the Emperor City and our project in Kolhapur, which is the Deccan City. We have also tied up for another project, which will start shortly.

Q: When do they start contributing?

A: In about one and half year's time.

Q: What is the cost incurred in these projects?

A: Totally, the cost of projects is about Rs 750 crore.

Q: How soon will you be able to complete these private placements for fund raising?

A: We are in the process and it should take about another two months.

Q: Are you talking to foreign investors?

A: There are a whole lot of people, including foreign and Indian investors.

Q: You are looking at raising Rs 400 crore?

A: Yes.