Parsvnath Developers reported net profit of Rs 31.37 crore for the quarter ended December, 2010 against Rs 49.77 crore in the same quarter a year ago. Its revenues stood at Rs 24.36 crore versus Rs 197.96 crore, year on year (YoY). The company`s current debt was at Rs 1,100 crore overall.
Pradeep Jain, chairman of Parsvnath Developers in an interview with CNBC-TV18's Mitali Mukherjee and Udayan Mukherjee said that the company plans to reduce debt by another Rs 100-150 crore in the next 45-60 days.He also informed that the company has no plans to acquire new loans in the near-term.
Below is the verbatim transcript of the interview. Also watch the accompanying video. Q: Your stock has been hammered over the last couple of weeks perhaps on some fears that much of your stocks is pledged and some of that pledge stock could be being sold in the market. Can you clarify what the situation is with pledges of Parsvnath stock and why your stock price has collapsed so much in the last fortnight? A: The stock market prices are beyond our control. There has been no promoter sale. I do not know how and in what way the prices are hammered. I believe it is due to some bear cartel or something active on our counter.
Q: The question we asked was whether any of the promoter shares are pledged at this point on that or are you putting out a categorical no? A; There is no sale as of now of the promoter pledge shares. Q: How much is pledged? A; Around 80% of the promoter equity is pledged with large financials institutions. Most of our equity is pledged along with hard security for taking loans, for execution of our project, etc.
Q: The problem with this pledge shares is when the stock price collapses quite rapidly then you need to top up margin or people start calling back some of these pledges or sell the stock. Have you had any such advances from the institutions that the stock is pledged with? A: Most of our shares are pledged with hard security. We are topping it up with cash and hard security wherever there may be margin collapse. However, we are not pledging our shares further. We keep getting our shares released on regular basis. This pledge of the shares with large institutions, since the last one year, has been that the price moves from top to bottom. That is not the threat to us as a promoter neither to our company. Q: How tight is liquidity now for most real estate developers, including, yours given how interest rates have moved? Given how tight the market seems to have become would you concede that liquidity for execution is becoming a bit tight? A: From the last 18 months we are regularly focusing on reducing our debt and we have substantially reduced it from the peak level to Rs 1,100 crore. Couple of private equity investors have also been introduced in our projects.
We are in a fairly good cash situation to meet the execution and re-implement our servicing etc. We are also reducing debt through our internal accruals. As of now, we are not focusing on acquiring any new loans in the short-run.
Q: You had guided though to the fact that you would scale it down by Rs 800 crore by the end of this financial year which we are at the end of
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
