Mammoth plans ahead for Parsvnath Developers

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Parsvnath Developers debuts with 80% premium Parsvnath Developers can open above Rs 550: Sharma Parsvnath Developers to list around Rs 550 on Nov 30 Midcaps, smallcaps rallying: Watch out for this space Parsvnath Developers will open at Rs 520-550: Choksey Parsvnath BSE | NSE 25/05/12 Are Mutual Funds betting on Parsvnath? Other Stocks in this news Unitech |

After receiving a robust response during the subscription period from investors, real estate major Parsvnath Developers has listed with good premium of 80% over its offer price of Rs 300 per share.

 

Pradeep Jain, Chairman of the company, gives some insight to where the company is headed and informs investors about growth plans and future prospects of the company.

 

He says that the company plans to come out with 14 SEZs across the country, and have already received the government approval for 11.

 

He also notifies that the company will be developing 14 five-star hotels, the land for which is already acquired, and plans to complete this in the next 3-4 years.

 

Excerpts from CNBC-TV18's exclusive interview with Pradeep Jain: 

 

Q: This is a big listing for you; more than Rs 550, but now your investors would want to know all the details of your land bank, which you could not quite talk freely about before your issue. Could you lay out where all the land banks are and what kind of reasonable market value one can ascribe to those?

 

A: We have land banks across the country; we are enjoying the truly pan Indian presence across the country. At present, we are working in 41 cities, 14 states in all the verticals, which includes integrated townships, shopping malls, office complexes, standalone housing complexes and the unique thing we are enjoying is the Delhi Metro.

 

The total-developing rights with the company as of today is about more than 180 million sq ft. Also, we are coming out with 14 SEZs across the country, and out of 14 SEZs we have already got approval for 11 SEZs from the Centre as well as from the State Governments.

 

Q: Of this 108 million sq ft possible development, what are the top three destinations? Could you break that up for us and ascribe a reasonable market value according to your estimate for the top three locations?

 

A: In Delhi we are developing a Metro. In Gurgaon we are developing a number of projects, and also in Noida and Greater Noida it is the same. If you divide 108 million sq ft area, about 40% of it is in North India and the rest of the area is in other parts of the country like Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, Maharashtra.

 

We are also on the way to set up 14 five star hotels across the country for which the land is already acquired by the company. The blueprint is also ready and we are on the way to sign the management contract with the operator and then we will start. We are expecting to complete all these hotels in three-four years.

 

Q: There are some research reports about valuations of your company and some of them predict that in FY07 you could actually go on to get revenues of a couple of thousand crore which could go up to Rs 4,000 crore of actual revenues realized from your projects by FY08. Are those reasonable estimates you think?

 

A: I am not going towards the number, but from the last five years our annual growth is more than 140% and we keep continuing with that because we have a big land bank. A lot of projects are already secured by the company. We plan that our results will be better than the numbers you have just mentioned.

 

Q: Are you saying that it could be even more than Rs 4,000 crore of booked revenues in FY08?

 

A: I am not talking about the numbers, but in FY06 it was Rs 653 crore and historically, for the last five years our annual growth is more than 140%. We are expecting more than that in time to come.

 

Q: Could you break up your expected cash flows without going into specific numbers on how much would come from residential development, commercial property development and how much from other shopping malls, multiplexes that you are seeking to develop?

 

A: As far as the commercial side goes, we are leasing out all the metro stations- not selling. The seven properties out of eleven are on the way to be completed by March 07. The rest of the properties will be completed in next two and half to three years. And related to the other commercial developments, 60-75% we will be leasing and rest we are selling.

 

Talking about revenues, 70-75% of it will come from the residential side- either from the integrated township or standalone housing complexes- and 25% will come from others related to the lease rentals and from sale of the commercial places etc.  

 

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