a. Industry Structure & Development:
Real estate sector is one of the most globally recognized sectors. It comprises of four sub sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.
In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. Bengaluru is expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
By 2040, real estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much- needed infrastructure for Indias growing needs.
Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform, which will allow all kind of investors to invest in the Indian real estate market. It would create an opportunity worth Rs. 1.25 trillion (US$ 19.65 billion) in the Indian market in the coming years.
The residential sector is expected to grow significantly, with the central government aiming to build 20 million affordable houses in urban areas across the country, under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs.
c. Segment-wise analysis
Your Company is dealing in only one segment i.e., buying and selling of vacant land.
After a prolonged period of falling and then stabilising, residential prices are likely to start rising again. We project around 5% capital value growth for the residential property segment in the country in 2022. Many of the supply and demand-side factors, assessed over the last decade, have started putting upward pressure on house prices. Residential sales momentum is expected to continue in 2022 as prospective homebuyers preferences for bigger lands, better amenities and attractive pricing will keep them interested to seal the deals.
e. Threats, Risks, and concerns
India is touted to be the most populous country by the year 2050. More than 50 per cent of people are urban centers and Tier 1 cities. To accommodate the population, India would require more new cities and urban centers on a mass scale in order to provide the required resources to the inhabitants.
There are a lot of impending projects in the Indian real estate market starting from public sector projects to private sector housing colonies. There is a delay happening in the completion of these projects and the reason for this is that the project does not get enough funding or there is a lack of technology to complete these projects on time. Another big challenge in the Indian real estate sector is the protracted approval process because project approvals in India take about days to years because there is no option of a single-window clearance and it often results in time and cost escalations.
Since the Russia-Ukraine conflict began on February 24, 2022, a rise in prices of steel and cement has been real estate industrys greatest concern. The risings cost of raw materials like steel and cement as well as labour will finally be passed on to the buyer. This will also impact projects delivery timelines.
f. Internal control systems and their adequacy
Your Company has in place, adequate internal control systems and procedures commensurate with the size and nature of our business. These procedures are designed to ensure that:
* An effective and adequate internal control environment is maintained across the Company.
* All assets and resources are acquired economically, used efficiently and are adequately protected.
* Significant financial, managerial and operating information is accurate, reliable and is provided timely, and
* All internal policies and statutory guidelines are complied with.
g. Key Financial Ratios
The particulars of key financial ratios are mentioned in the notes forming part of the financial statements.
h. Material developments in human resources/industrial relations front, including number of people employed
The Company is continuously endeavoring to align the employees objectives with the business objectives of the organization through its policies, process and other development initiatives to achieve its organizational goals. Industrial relations have been cordial.