The company plans to invest nearly Rs 2,000 crore for construction and will fund it with a mix of accruals, debt and private equity funding.
Noida-based real estate company ATS Group on Wednesday announced its entry into the mid income housing segment with the launch of a new vertical HomeKraft to cash on the potential of the PMAY scheme (MIG) for affordable housing.
The company is planning to invest close to Rs 2,000 crore for construction of these units and will fund it with a mix of internal accruals, debt and private equity funding. It is already in talks with a major PE fund to raise funds for the newly launched vertical.
HomeKraft plans to sell around 6,000 units and is looking to generate Rs 4,000-5,000 crore under the vertical in the next three to five years. “The projects will be launched in the joint venture model. The first project is expected to be launched in the first quarter of the next financial year in Noida," HomeKraft chief executive officer Prasoon Chauhan said.
While ATS will continue to focus primarily on boutique and premium housing, HomeKraft would exclusively cater to the housing needs of affordable and mid income housing groups, the company said.
“Seeing the robust demand and the encouragement being provided through the PMAY scheme by the government under the MIG category, we thought we should start a new initiative with a new team that will do units whose sizes are below 1600 sq ft,” said Getamber Anand, chairman and managing director, ATS Group.
“These units will be priced between Rs 30 lakh and Rs 70 lakh and will typically consist of smaller formats – 2 BHK and 3 BHK and will be targeted at the aspirational buyer,” he said.
Where will the land come from? From non-conventional developers who had bought land and are now open to offering their lands through the model of joint venture.
“We intend to be asset light. Most of the projects will be in the JD and JDA space. We are initially focusing on NCR. The first project will be in Noida. We have tied up with four land owners and are looking at about 10 mn sq ft to start with. Construction of the first project is expected to begin in the first quarter of the next financial year and it will take us three to five years to deliver,” said Chauhan.
The company is open to getting in private equity players who are interested in long-term vision of seven to 10 years.“We are dominant in the North so we will first start with NCR and then gradually inch towards Tier 2 and 3 towns and in the interim look for a financial partner. We are already in dialogue with some big names in the private equity space,” Anand told reporters.The Great Diwali Discount!
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