Mumbai-based listed real-estate developer Ajmera Realty and Infra plans to cut down its corporate debt by 90 percent in three years and keep it minimal.
The group said it expects revenue from internal accruals to bring down its current corporate debt of around Rs 525 crore.
The company is also looking to invest in redevelopment and slum rehabilitation projects followed by stressed real estate projects where it aims investment anywhere in the range of Rs 100 to Rs 300 crore, Dhaval Ajmera, Director, Ajmera Realty and Infra, told Moneycontrol.
What is the current debt?
Speaking exclusively to Moneycontrol, Ajmera said: "Our total debt is around Rs 778 crore. We have repaid around Rs 54 crore last fiscal, and we are focusing on bringing our corporate-level debt down first. Our debt has two parts –corporate level debt and project-specific ones. Out of this total debt, corporate debt will be around Rs 525 crore. The rest is project-specific debt. From Rs 525 crore, we want to cut down around 90 percent of the total corporate debt in the next three years."
"We plan to bring down this debt to minimal from our internal accruals. Some projects are under closure, and they will have surplus cash flow coming in. There will be land sales, and there will be some assets that are ready. All these factors will help us cut debt," he said.
The company is also exploring stressed projects in Mumbai, Pune and Bengaluru, which will be its cities of focus.
"Mumbai, Pune and Bengaluru are the cities where, if we have opportunities coming in, we will look at. There is no fixed investment plan or budget for stressed projects, but it depends," Ajmera said.
He added, "We are not looking to invest, say Rs 1,000 crore or Rs 5,000 crore, but I believe decently sized projects in the range of Rs 100 crore to Rs 300 crore will work. At the moment, we have no stressed projects in our portfolio, but we are in talks, and these are at a very preliminary stage and nothing is finalised."
The company plans to invest Rs 250 crore- Rs 300 crore in the ongoing fiscal and launch four projects, with a potential of Rs 2,000 crore.
"We are having 10 ongoing projects currently across India. Some are nearing completion, and some are under construction. Four of them are in Bengaluru and six are in Mumbai. Of these, two are commercial projects. Additionally, we are going to launch four more residential projects this year in Mumbai city limits, in areas like Bhandup, Ghatkopar and Vikhroli."
"We will disclose the location of the fourth project soon. None of these are redevelopment projects, and the Bhandup one is a slum rehabilitation project in the affordable segment. The rest are all in the mid-budget segment. Overall, if you see our existing and ready-to-move projects, they are worth about Rs 2,000 crore. On top of this, we are having four launches, with a potential of another Rs 2,000 crore. So, projects worth Rs 4,000 crore are under our kitty or will come under our kitty," he said.
Also read: Ajmera Realty to invest around Rs 1,000 crore in four projects despite COVID-19
Segments of focus
The company is open to all sorts of opportunities, including the redevelopment of old buildings, slum rehabilitation, commercial and warehousing projects. "We are open to all sorts of opportunities. We are going to launch a slum rehabilitation project. Our experience with slum projects till now is doing good, we do not have any problem. We are not looking at a very small slum rehabilitation project, but around 200 odd hutments are what we see at," he said.
Cities of focus
The company plans to continue to grow in cities like Mumbai, Pune, Bengaluru, and Ahmedabad and has no plans to expand further as of now. "Our thing is that it is better to expand where our base is strong as compared to other cities. Demand and market change every year. We might enter some new market that we do not know of yet," added Ajmera.
According to the company, it plans to focus on Indian cities and is not looking to go international as of now. However, the company will keep a watch on the London market for expansion opportunities. The company currently has stakes in London, where it has four projects of around 1 lakh sq ft, with an investment of Rs 80 crore. In Bahrain also, the company has around Rs 80 crore investment in the real-estate market.
Also read: Ajmera Realty & Infra Q4 net profit rises 8% to 15 crore
"Our concentration right now is on Indian cities where we are completing and finishing whatever projects we have. If we must, we will probably expand in London more, but right now our focus is India," said Ajmera.
On May 22, Ajmera Realty and Infra India Ltd was trading at Rs 335.00 a share at 15.58 on the National Stock Exchange, down 1.92 percent from the previous close. On May 23, the company was trading at Rs 337.65 at 10.48 am, up 0.79 percent from the previous close.