Manoj Kumar Patodia, Vice Chairman and Managing Director, Prime Urban Development India Ltd

"The real estate bill promotes efficiency and level playing ground for real estate players leading to overall development of the sector."

Jul 21, 2016 11:07 IST IIFL Yash Ved |

Manoj Kumar Patodia, Vice Chairman and Managing Director, Prime Urban Development India
Manoj Kumar Patodia, Vice Chairman and Managing Director, Prime Urban Development India Ltd has immense experience in the fields of corporate management and exports, spanning over two decades. He has played a key role in the successful expansion of Housing business in southern part of India i.e. Tamil Nadu, for the company, specially, in affordable housing / villa.
 
Prime Urban Development India Limited has a varied portfolio, with its main focus in Real Estate Development and the Export of Cotton Yarns. The company also builds commercial spaces like malls, shopping and office complexes. Presently, the company is developing an exclusive Villa community and a huge residential community with luxurious apartments.
 
Replying to Yash Ved of IIFL, Manoj Kumar Patodia says "The real estate bill promotes efficiency and level playing ground for real estate players leading to overall development of the sector."
 
What outlook do you see for the real estate industry per se and sector?
We are very optimistic on the real estate sector. With the government reforms in various areas such as FDI, Real Estate Regulatory bill, REIT clearance, smart cities, housing for all, the sector is poised for better performance in the coming years. The government’s efforts in creating a level playing field will act as a catalyst for future growth in the sector.
 
Brief us about your current and upcoming projects?
Currently, we have 3 projects in Tirupur city in Tamil Nadu. Prime Enclave Vistas is our apartment project in Tirupur. The construction for this project is complete and we are left with few apartments for sale. Our 2nd project is ‘The Onyx’ which is a Villas Project. It’s a gated villa project where we have sold 8 units out of 34 units i.e. 23.52% of the total project. Phase I has been delivered with people already staying and Phase II is currently under progress and is expected to be completed in 24 months. Our 3rd project is sale of plotted lands in Tirupur. In the last 2 years we have sold over 140,000 sq ft of plotted land.
 
Your overview on real estate bill?
The real estate bill promotes efficiency and level playing ground for real estate players leading to overall development of the sector. Mandatory public disclosure of registered properties, disclosure of pro-forma agreements, reduction in diversion of funds paid by buyers, consent for alteration of plans are key provisions that will bring increased trust & faith in the sector. We believe the governments macro agenda of housing for all, smart cities will get a huge fillip with the implementation of the Bill.
 
What is your mix in terms of residential and commercial?
The 3 projects under development are all geared towards Residential. We have a commercial mall which we had sold few years back. We have a construction agreement for the same. 
 
Are you in talks with PE players for projects?
We follow an asset light business model where we partner and collaborate with Land owners. This limits our cash investment in land and generates high IRR on our investments which are in the nature of construction, permissions, sales & marketing . Therefore, currently we have no plans for any external fund raising.
 
What are your plans for the road ahead?
South India is a growing real estate industry. On the back of flourishing IT/ITES, auto industry, textiles and garmenting, real estate has become prominent in many locations viz Bengaluru, Chennai, Coimbatore, Tirupur. We at Prime Urban Development India, want to capitalize on this aspect and grow our real estate presence. Having created a strong brand in the organized real estate space in Tirupur, we plan to expand our reach in Coimbatore and Chennai in medium to long term. 
 
What is the philosophy of the company?
At Prime Urban Development India we are focused on real estate in South India. Within South India our core markets shall be Tirupur and a vision to expand our business in Coimbatore and Chennai. We shall continue to be asset light in our business model with a clear objective of generating high IRR on our investments.
 
Give us a brief on your Textile Business?
Prime Urban Development India was engaged in Textile manufacturing and trading until year 2005. Thereafter we saw tremendous opportunities in the real estate space and decided to focus our attention to real estate which had a potential of generating higher return on capital. Since 2005 we have continued to remain only in Real Estate Development and Textile trading. 
 
Give us the overview on the financials?
For FY16, Consolidated Revenue was Rs. 72.2 Crs and Net Profit of Rs. 14.5 Crs. In the Real estate division Revenue was Rs 38 crs as against Rs 18.4 crs in FY15. EBIT from Realty Segment was Rs 25.3 crs with margin of 74.40% as against 30% in FY15. Further, we have recommended dividend of Rs. 0.40/- per share (20% of Face Value) for the strong performance in FY16. We have no Long Term Debts in our Real estate business and all our projects are generating healthy cash flows.

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