Housing Development & Infrastructure Limited (HDIL) is engaged in construction and development of residential projects, commercial and retail projects, Slum Rehabilitation and Development, Land Development, including development of infrastructure on land which we then sell to other property developers. The company has an in-house development team which covers all aspects of property development from project identification and inception through construction to completion and sale. Since its establishment in 1996, the company have developed 32 projects covering approximately 28.09 mn square feet of saleable area. The company also have constructed an additional 4.31 million square feet of rehabilitation housing area under slum rehabilitation schemes.
Mr. Hari Prakash Pandey, Deputy General Manager-Finance, Housing Development & Infrastructure Limited has been associated with HDIL since December 2005. He is a qualified Chartered Accountant and has done his MBA (Finance) from Apsema & Latrobe University (Melbourne University). He has received Appreciation Letter from being nominated for Best CA Award 2008 under Infrastructure & Real Estate Category in India from Institute of Chartered Accountant of India. In HDIL, he is a part of top management team and key member involved in Investor relations, Financial strategies & policies, Research, Due Diligence, valuations , raising of funds.
Speaking with Yash Ved of India Infoline, Hari Prakash Pandey says "Our debt equity ratio has come down from 0.94 to around 0.44 after the QIP".
You recently raised Rs16.88bn from QIP? Then why are you again raising US$450mn?
Last time, we did fund raising of Rs16.88bn primarily for repayment of debt. Our debt equity ratio has come down from 0.94 to around 0.44 after the QIP. The company has complete control over its liquidity scenario over the next 15-18 months. We have no principal outstanding due till October 2010.
As far as the new resolution of US$450mn is concerned, the company has decided to put it forward for the shareholders? approval. During the meeting, the independent directors were of the view that as part of good corporate governance, we should take all enabling resolutions once in AGM. This resolution will be valid till September 2010. If the company feels the requirement for funds, we will go for US$450mn.
As of now, this fund raising will be primarily targeted towards ongoing and future expansion projects, and not for repayment of the debt.
What is the current debt?
Our current debt post QIP is Rs30bn.
Brief us about your Mumbai International Airport project?
The Mumbai International Airport slum rehabilitation project is on schedule. We got the project in October 2007. The construction activity is in full swing. By December 2009, we should be able to add over 20,000 units for the Government of Maharashtra so that reallocation of slum dwellers from airports can happen.
The Phase I of the project will be completed in December 2009 and Phase II of the project will be launched in early 2010. The project is on schedule in terms of construction activity and also in terms of financial closure. We are targeting 2013 for the completion of the project.
Brief us about the TDR prices? What is the outlook?
TDR prices have seen tough time in early 2009. Prices have bottomed out to around Rs900-1000. New launches picked up in March 2009. The construction activity increased and liquidity scenario has improved. The TDR prices have recovered faster. As of now, the TDR price is in range of Rs1700-2000 per sq ft. I think TDR prices will stabilize between Rs2200-2500 in the next 6-8 months.
What are the current and future projects?
We have three residential projects within Mumbai. We have projects in Kurla West (premiere), Kurla East (galaxy) and another project at Four Bunglows, Andheri (metropolis). The launch price for these projects is starting from Rs4251 for galaxy, Rs7651 for metropolis and Rs5251 for premiere.
Further launches will be in the suburbs. These will be towards affordable housing, where unit size is less than 1000 sq ft, and price range will be Rs4500-6000 per sq ft.
We will have close to 5mn sq ft of residential projects by the year end.
Going ahead, our strategy will be more focused on the residential projects. We have a target of around 2-3 mn sq ft to be launched before March 2010. For existing and new launches, we will have close to 5mn sq ft of residential projects.
In the commercial segment, we have projects in Bandra Kurla Complex, and another project at Four Bunglows, which is part of the project metropolis. We have started construction on those projects. Currently around 3-4 mn sq ft of commercial space is on hand. All these projects will be completed in 2011.
We are also working at three locations outside Mumbai i.e. Pune, Hyderabad and Cochin. Unless the real estate market improves, we will not launch these projects. We are planning to launch the project in Hyderabad in the next 6-8 months.
We have HDIL Leisure, which is 100% subsidiary of the company. Currently, this company is exploring the opportunities in building 5-star hotels and looking at specialty restaurants across India.
What is the outlook of the industry?
I think the industry has recovered faster than anticipated. Land transactions have been picking up in Mumbai.
Do you see any price correction in Mumbai?
Prices bottom out between late 2008 and early 2009. We have seen revival in real estate market. I do not see 5-10% increase in prices going forward. In terms of commercial projects, there is too much of supply in the pipeline. There is no substantial jump in commercial projects.