Yogi Infra Projects Ltd Management Discussions

12.5
(1.96%)
Jul 24, 2024|12:00:00 AM

Yogi Infra Projects Ltd Share Price Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The key issues of the Management Discussion and Analysis are given below.

1. Industry Structure and Developments:

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. Real estate sector in India is expected to reach US$ 1 trillion by 2030. By 2025, it will contribute 13% to the countrys GDP. Rapid urbanisation bodes well for the sector. The number of Indians living in urban areas is expected to reach 525 million by 2025 and 600 million by 2036. Construction is the third-largest sector in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at US$ 52.48 billion between April 2000 to December 2021. Government of Indias Housing for All initiative is expected to bring US$ 1.3 trillion investment in the housing sector by 2025. Indias Global Real Estate Transparency Index ranking improved by five notches from 39 to 34 since the past six years from 2014 until 2020 on the back of regulatory reforms, better market data and green initiatives, according to property consultant JLL. Home sales volume across seven major cities in India surged 113% YoY to reach 62,800 units in the third quarter 2021, from 29,520 units in the same period last year, signifying healthy recovery post the strict lockdown imposed in the second quarter due to the spread of COVID-19 in the country. 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 by 2022, under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs. Expected growth in the number of housing units in urban areas will increase the demand for commercial and retail office space.

The following policies were launched by the Government of India to boost the real estate sector:

The Reserve Bank of India (RBI) policy

In October 2021, the RBI announced to keep benchmark interest rate unchanged at 4%, giving a major boost to the real estate sector in the country. The low home loan interest rates regime is expected to drive the housing demand and increase sales by 35-40% in the festive season in 2021.

Housing for economically weaker section:

On July 09, 2020, Union Cabinet approved the development of Affordable Rental Housing Complexes (AHRCs) for urban migrants and poor as a sub-scheme under Pradhan Mantri Awas Yojana - Urban (PMAY-U).

Since 2019, 41,75,214 houses have been sanctioned and 20,39,571 houses have been delivered to urban poor under the Pradhan Mantri Awas Yojana-Urban (PMAY- U)

FDI

The Government has allowed 100% FDI for townships and settlements development projects.

Provision for reduction in minimum capitalisation for FDI investment from US$ 10 million to US$ 5 million to boost urbanisation.

In January 2018, the Government allowed 100% FDI in single-brand retail trading and construction development without Government approvals.

• Indian real estate is expected to attract a substantial amount of FDI over the next two years, with US$ 8 billion capital infusion by FY22.

Land Acquisition Bill

In December 2014, the Government passed an ordinance amending the Land Acquisition Bill.

This ordinance is intended to speed up the process for industrial corridors, social infra, rural infra, housing for the poor and defence capabilities

REITs

Real Estate Investment Trusts (REITs) in non-residential segment will open channels for both commercial and infrastructure sector. In March 2019, Embassy Office Parks, Indias first REIT, went public.

First REIT raised Rs. 4,750 crore (US$ 679.64 million) and was launched in early 2019 by global investment firm, Blackstone, and realty firm, Embassy group.

In July 2021, the Securities and Exchange Board of India lowered the minimum application value for Real Estate Investment Trusts from Rs. 50,000 (US$ 685.28) to Rs. 10,000-15,000 (US$ 137.06 - US$ 205.59) to make the market more accessible to small and retail investors.

According to EY, > US$ 9.7 billion has been raised in India via real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).

Government-backed Stress Fund

The Special Window for Completion of Construction of Affordable and Mid-Income Housing (SWAMIH I) supported housing projects have started witnessing fresh sales and collection of dues from existing homebuyers, In November 2020, SBICAP Ventures Ltd. managed fund cleared investments worth >Rs. 13,200 crore (US$ 1.78 billion) for 136 projects and has started deploying funds across 36 projects

Construction Premiums

Construction premiums and levies in Maharashtra account for >30% of the total project cost.

In a bid to boost the real estate sector amid the pandemic, construction premiums and levies payable by builders in Maharashtra are set to be halved for one year until December 31, 2021.

Green Building Movement

With 6,548 registered green building projects, India is among one of the three countries that have a green building footprint.

Indian Institute of Architects (IIA) and CII-Indian Green Building Council (IGBC) signed a MoU to boost green building movement in the area of architectural design and planning.(source: https://www.ibef.org/)

2. Opportunities and Threats:

Continuing increase in demand of low housing and slum rehabilitation projects are opportunity of growth to the Company. The Company is constantly seeking opportunities at the current juncture.

3. Segment wise performance:

The Company has started its operations and is showing some progress in its operations during the year under review. The Company has already entered into a Joint Venture agreement for the purpose of redevelopment of residential project in FY 2015-16. The Company is constantly striving towards obtaining infrastructure contracts.

4. Outlook:

The Company will focus on making long term strategic investment in new projects.

5. Risk & Concerns:

The Company is exposed to various sector specific risks and generic risks which the Company understands and hence is encompassing a framework to deal with the risks.

6. Internal control systems and their adequacy:

There is an adequate internal control system commensurate with the size of the Company and the nature of its business.

7. Strength:

There are professionals and Independent Directors on the Board of the Company who are in the process of developing a strategic roadmap for the Company to explore opportunities in the sector.

8. Comment on Current years performance:

The Company is constantly striving to seize the opportunities of the infrastructure sector which offers tremendous opportunities.

The Company at this point of time is earning revenue from its Non-operational activities only.

The Management of the Company is devising a futuristic and strategic roadmap for the Company and keeping all operating expenses under tight control.

9. Cautionary Statement:

Statements in this Management Discussion and Analysis Report, Describing the Companys outlook, projections, estimates, expectations or predictions may be "Forward looking Statement" within the meaning of applicable securities laws or regulations. Actual results could differ materially from those expressed or implied.

By the order of the Board of Directors

For Yogi Infra Projects Limited

Sanjay Agarwal Basudeo Agarwal
Mumbai Managing Director Director
August 5, 2022 DIN: 00462902 DIN:00462889

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