is a real estate development company in India. Within a short span of time it has completed and delivered 17 projects consisting of 9 group housing, 2 townships and 6 commercial projects comprising an area of 10.68 mn. sq.ft. The company currently has 53 projects under development consisting of 21 group housing projects, 21 integrated townships including a Hi-Tech township, 9 shopping malls & commercial complexes and 2 hotel projects. The Company re-entered into Construction business through a 100% subsidiary company Omaxe Infrastructure & Construction Ltd. in 2009.
Rohtas Goel, Chairman and Managing Director, Omaxe Ltd
has over two decades of experience in Construction and Real Estate Development and is the promoter of the Company. Being a Civil Engineer, he has nurtured Omaxe from a construction house to a renowned brand in the Real Estate today. He has been an Honorary Consulate of the first Honorable Consulate of Republic of Congo Brazzaville in India. Mr. Goel has been honored and rewarded by multifarious institutes and organizations. He has been titled with Pride of Country award by the Society of Industrial Business Achievement, New Delhi. He is also the Achiever of the Millennium award by All India Achievers Conference, New Delhi.
Replying to Yash Ved
, Rohtas Goel says, “The amount of sales that we anticipate is approx Rs20bn–Rs25bn from new launches and on going projects.”
Brief us about your current and upcoming residential and commercial projects?
The company has launched various projects like The Forest Spa, ultra luxury apartments & penthouses, at Surajkund Road (780,000 sq. ft.), Omaxe Residency, Lucknow - a group housing project in Lucknow, Uttar Pradesh (1,200,000 sq. ft.), Shopping cum office complex in PDA-Omaxe city (50,000 sq. ft.) and the tallest commercial tower of Punjab India Trade Tower, in Mullanpur, Chandigarh (240,000 sq. ft.)
The response for these projects has been good. In addition to this, we got projects to construct AIIMS at Rishikesh and Housing colony for AFNHB. The value of these two construction projects are approx. Rs1.30bn.
We are further planning to launch a slew of projects in cities such as Allahabad, Patiala, Chandigarh, Indore, Bhiwadi, and Lucknow etc. In pipeline are commercial space in Omaxe Waterfront Hi-tech City in Allahabad, Hi-Tech Township in Lucknow besides residential projects in Chandigarh, Indore, Ludhiana etc.
What is the total area under development?
The total area under development is 113.94 sq. ft.
Which cities are you now targeting?
We will be focusing on Tier II & Tier III cities such as Allahabad, Lucknow, Ludhiana, Chandigarh etc. as these cities offer ample growth potential for city development. The developed infrastructure and the favorable Government policies have lead a high growth rate. Even a variety of businesses including retail, IT and others are eyeing Tier II and Tier III cities in India as highly attractive destinations. With these, a lot of development is expected over the couple of years.
Any fund raising plans?
We are open to raise some private equity at project level. Further, we have identified few assets, which we intend to exit on a as-is-where–is basis. We believe that capital market for real estate is still subdued.
How do you see margins going forward for FY11?
There has been lot of strain on margins in previous few years as the cost of construction was going up and most of the inventory was sold at historical prices. However, now whatever new projects are launched in Tier II and Tier III cities are very affordable for common man and still give us sufficient cushion as the land cost was not too high unlike metros. Going forward we expect the EBIDTA margins to be in the rage of 25 – 28%.
What kind of sales volume are you expecting in the coming quarters in Tier-I and Tier-II cities?
The amount of sales that we anticipate is approx Rs20bn–Rs 25bn from new launches and on going projects. Looking at the current response where our projects are witnessing a high amount of sales, we definitely look forward to even a better response. The high levels of demand existing in these cities and comparatively low supply provide us a scope to perform even better and minimize the gap.
How do you see the pricing scenario in the coming fiscal?
The prices today are very much within range of common man. We at Omaxe are very much concerned about housing needs of larger part of India. We don’t intent to escalate the price significantly but as there have been inflationary pressures on the cost so around 10 – 15% hike may be considered in next 3 – 4 months on case to case basis. Generally speaking, some markets have already crossed their previous peaks and the prospective customers are still holding back on their need. This may not be a good sign for such cities and developers.
What outlook do you see for the real estate industry?
Indian Real Estate is still in the initial stage of business cycle. There is still gap of more than 25 million dwelling units and 90% of demand falls in affordable housing category. It is going to be a long-term game and this business shall be perceived as any other manufacturing business where the play will be more of volume than value. There are still lots of unorganized player in the market which gives immense scope for branded players like us to explore new territories.
Brief us about the launch of Omaxe residency in UP? What kind of sales revenue you expect from this project?
Post the successful possession of its first two projects Omaxe launched Omaxe Residency, a group housing project in Lucknow, UP which has a realization value of approx. Rs2.5bn.We got a very good response and almost 850 units out of 960 units of this project were sold out within a week of starting the bookings. Now, the project is tagged as sold out.
What are some of the new launches planned for FY11?
We will be launching few more realty projects in this year and are expecting infrastructure / construction contracting projects from Government, mainly from UP and Punjab. The announcement shall be made in due course of time.
What is your view on real estate regulator?
The Draft Bill on Model Real Estate Act, which is a need of the hour, is meant to promote planned and healthy real estate development with a view to protection of consumer interest on one hand and to facilitate smooth and speedy construction on the other. Moreover, one of the prime objectives of the bill is to remove malpractices and fly-by-night developers. The initiative taken by the ministry is commendable and seems to be a step in the right direction. However, there are certain provisions proposed which may defeat the very purpose for which the act has been proposed. According to planning commission survey, there’s a shortage of approx. 24.7 mn housing in India and if the draft bill is introduced in its present form then it would hamper rather promoting India’s real estate development.
Besides, the developers that are working to meet the acute shortage of dwelling units, which is in country’s interest, will be refrained from working at the desired pace. The proposed act in its present form will add costs and delays to the lifecycle of the project. In our opinion simplifying the approval procedures, facilitation, regulation, control and growth of real estate development and safeguarding interest of all stake holders should be its objectives.
What is your land bank?
The company has land bank of 4500 acres (approx.) comprising 164 mn.sq.ft ft of developable area across 30 cities of 9 states in India. Presently it is focusing on the construction of 114 mn. sq. ft. (approx) of area out of which 50 mn. sq. ft. (approx) has been sold.
What is the current order book?
The current order book is of Rs. 8.80bn. Having 8 (Eight) Infrastructure / construction contracting projects under execution. Recently, we have signed contracts to construct the Housing colony for Air Force & Naval Housing Board at Meerut and new All India Institute of Medical Sciences (AIIMS) at Rishikesh, Uttarakhand. Apart from this, other construction projects include Manyavar Kanshiram Allopathic Medical College and its Associated Hospital at Saharanpur, U.P, Modern Jails at Faridkot and Kapurthala, Modernisation of ESI Hospitals at Cuttak and Bhubaneswar, Convention Centre at Sonepat, and construction of a township at Dariba in Rajasthan. The expected order book is ~Rs20bn in the coming year
What is the current debt?
Total Debt is ~Rs18bn.