Bengaluru-based realtor Puravankara Group plans to launch 18 residential projects, spread across 16.28 million sq ft, in Bengaluru, Pune, Mumbai, Kochi, Coimbatore and Chennai this fiscal. The sales value of all these projects, over three-five years, is about Rs 8,500 crore.
“We are looking at adding 6.35 million sq ft under the Puravankara brand, 6.75 mn sq ft under Provident and 3.18 million sq ft under Purva Land. From a launch point of view, we are talking about 18 projects to be able to create scale in the market. We have to create the bandwidth to deliver. They will start rolling out from mid-July onwards,” Abhishek Kapoor, CEO, Puravankara, told Moneycontrol.
Of the 18 projects, four are plotted developments and 14 residential under the Puravankara and Provident brands, he said.
Plotted developments are subdivisions of land into plots or lots for sale or lease to homebuilders for new housing developments. The plots typically have the same dimensions, and there's no land between them, but they're usually divided by a network of roads
The company will focus on the current markets but its goal is to “go deeper in Bengaluru, Pune, Chennai, Mumbai and Hyderabad”, he said.
‘Has got momentum now’
Kapoor emphasised that despite the three waves of COVID-19, the company now has the momentum to do more volumes than what “we have done in the past. This is to do with the monetisation of our current land parcels and investments we have already made, as our land parcels have been paid for. Most of the launches are planned between Q2, Q3 and Q 4 this fiscal,” he said.
Asked if the Provident brand will account for a substantial portion of the new launches as the focus has been on affordable housing, Kapoor said both Provident and Puravankara will launch around 6 million sq ft each this year. “We will be seeing a significant growth in Provident,” he added.
“This year, we will have nine launches under Puravankara and five under Provident and four under Purva Land. Going forward, in value terms, we are targeting 35 percent value from Puravankara, 35 percent from Provident (though the sq ft area will be larger due to lower price points), 20 percent value from Purva Land and 10 percent from commercial projects,” he said.
Demand for larger homes to be robust
Kapoor is of the view that demand for larger homes will be robust. “Larger homes are much more in demand now. There is a lot of pent-up demand and that is fortunately good for us. It is not a perishable demand. People are preferring larger homes and luxury has done much better. Demand was always there, it is just that people had deferred their buying decision,” he said.
On whether the company has received RERA approvals for projects in the pipeline, Kapoor said they are in different stages right now. “Some are with RERA, and some in the pre-launch mode. In the case of projects that have been given extended timelines, we are pretty much on track. Our focus is on operations and to ensure that deliveries happen.”
The company is looking at delivering close to 3,000 units this year. These would be in Purva Land-Tivoli Hills (Bengaluru); Provident Park Square (Bengaluru); Purva Silversands (Pune); Provident Kenworth (Hyderabad); Provident Woodfield’s (Bengaluru); Purva Promenade (Bengaluru); Purva Land Southbay (Chennai).
‘No plans to enter north India’
It does not have plans to enter the north Indian market. “The focus would be on the western and southern parts of the country,” he said. The company has, so far, invested close to about Rs 400 crore in the Mumbai residential market and “our emphasis will be on scaling our operations in Pune and Mumbai”.
The company is also considering setting up a capital-raising platform, including its Alternate Investment Fund (AIF) which has already been launched. “We are currently discussing raising capital for our commercial business. We are looking at multiple platforms. We are planning to take around 2.7 mn sq ft of commercial development to the market this year, scaling up our deliveries and building on a large portfolio,” he said.
The real-estate company is also evaluating opportunities in the stuck projects space.
In May this year, the company reported a consolidated net loss of Rs 20.06 crore for the quarter ended March on a lower income. The company had posted a net profit of Rs 9.06 crore in the year-ago period. Total income also fell to Rs 320.12 crore in the period under review from Rs 340.44 crore in the corresponding period of the previous year.
Kapoor said the company posted net loss in the fourth quarter of last fiscal due to lower deliveries and owing to the fact that the cost of launches incurred during the quarter needs to be factored in the same quarter even though the revenue and consequent profit can be realised only on delivery of the unit in future.
“A lot of disruption has happened in the two years during COVID-19 after 2020. During the pandemic, the company has focused on selling its ready-to-move-in (RTM) stock,” Kapoor said.
“We had almost 2.2 million sq ft and we must have brought it down to about 100,000 sq ft. That has given us significant cash flows over the last two years. We have also brought our net debt down to about Rs 1,850 crore. In the last year, our cash flows were strong. We had operating inflows in excess of Rs 2,200 crore last year. Sales volume in our RTM inventory came down by almost 67 percent across the group because of a lack of RTM inventory. Having said that, our sales volume in under-construction and new launches went up by 51 percent and our business grew by 9 percent in terms of sales value,” Kapoor said.
In the last quarter, the company sold close to 1.2 sq ft million, which is inventory worth Rs 831 crore. “We have seen a 51 percent growth in under-construction new launches during the year,” he added.
Puravankara has completed 77 projects, measuring over 43 million sq ft. Over 24.99 million sq ft of projects are under development. The company's land bank has a development potential of over 56.95 million sq ft. The launch pipeline is about 16.28 million sq ft.
Over the last 13 years, Provident Housing Ltd has launched around 21 million sq ft of projects across nine cities—Bengaluru, Chennai, Hyderabad, Mumbai, Pune, Goa, Kochi, Coimbatore and Mangaluru, out of which around 12.55 million sq ft has already been delivered. The affordable housing brand accounts for 41 percent of the launch pipeline.
The company’s non-Bengaluru projects account for 49 percent of the share of the ongoing and 26 percent of the launch pipeline.
In December 2020, Puravankara announced that IFC, a member of the World Bank group, and IFC Emerging Asia Fund would invest Rs 556 crore in its affordable housing platform to develop up to four projects.
The company also has land assets that have a development potential of 4.23 million sq ft in Colombo, Sri Lanka.
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