ET NowIn a chat with ET Now, Rohitaswa Poddar, MD, Poddar Developers Ltd, shares his business outlook. Excerpts:
ET Now: How would you utilise the Rs 125 crore worth of funds that you have raised? Who are the major investors and where will the funds be deployed?
Rohitaswa Poddar: The funds are going to be deployed to buy additional land in the affordable housing space in Mumbai's suburbs and peripheries.
We can’t divulge investors’ details right now. All in can say is they are large domestic mutual funds.
ET Now: Are you planning to develop about 1.1 million square feet in coming years? Can you broadly sketch the road map? How much land bank would be delivered in this calendar year, and in 2016 and 2017?
Rohitaswa Poddar: The current land bank is about 8.5 million square feet. We have delivered about 1.1 already. Another one-and-a-half million square feet is currently under construction. We should finish delivering that in the next 14-15 months.
Basically, it is like we are in an expansion delivery phase as it were. We have delivered about 3,000 flats over the last three years. We expect to deliver about 1,500-2,000 flats this year. We hope to increase this delivery rate by about 40% and 60% in the next year.
ET Now: You have a very low debt currently. Despite that, you have raised money via the QIP route. If you have raised money via QIP, ultimately it will impact your EPS. Is it a good strategy to raise money via the equity market route when your debt profile is extremely appealing?
Rohitaswa Poddar: We were deliberating on whether we should wait for another year or two until our equity price goes up, or whether we should dilute and buy land now. After much thought, we gravitated towards the fundraising route.
Our view is that there is stress in the real estate market in general. It is illiquid; most of the players are not financially sound at this point of time. It's also highly leveraged and sales are low. So we decided it was a very good time to buy land.
We had identified parcels of land even before the QIP. We wanted to cash in on possible economic revival.
ET Now: How much has been the dilution on account of this QIP?
Rohitaswa Poddar: We have raised about Rs 125 crore at Rs 1125 per share. So, we are approximately talking of 11 lakh shares. We will now go from 5.2 crore equity base to 6.3 crore. Therefore, we will go down from 74% to about 61%.
ET Now: How would you utilise the Rs 125 crore worth of funds that you have raised? Who are the major investors and where will the funds be deployed?
Rohitaswa Poddar: The funds are going to be deployed to buy additional land in the affordable housing space in Mumbai's suburbs and peripheries.
We can’t divulge investors’ details right now. All in can say is they are large domestic mutual funds.
ET Now: Are you planning to develop about 1.1 million square feet in coming years? Can you broadly sketch the road map? How much land bank would be delivered in this calendar year, and in 2016 and 2017?
Rohitaswa Poddar: The current land bank is about 8.5 million square feet. We have delivered about 1.1 already. Another one-and-a-half million square feet is currently under construction. We should finish delivering that in the next 14-15 months.
Basically, it is like we are in an expansion delivery phase as it were. We have delivered about 3,000 flats over the last three years. We expect to deliver about 1,500-2,000 flats this year. We hope to increase this delivery rate by about 40% and 60% in the next year.
ET Now: You have a very low debt currently. Despite that, you have raised money via the QIP route. If you have raised money via QIP, ultimately it will impact your EPS. Is it a good strategy to raise money via the equity market route when your debt profile is extremely appealing?
Rohitaswa Poddar: We were deliberating on whether we should wait for another year or two until our equity price goes up, or whether we should dilute and buy land now. After much thought, we gravitated towards the fundraising route.
Our view is that there is stress in the real estate market in general. It is illiquid; most of the players are not financially sound at this point of time. It's also highly leveraged and sales are low. So we decided it was a very good time to buy land.
We had identified parcels of land even before the QIP. We wanted to cash in on possible economic revival.
ET Now: How much has been the dilution on account of this QIP?
Rohitaswa Poddar: We have raised about Rs 125 crore at Rs 1125 per share. So, we are approximately talking of 11 lakh shares. We will now go from 5.2 crore equity base to 6.3 crore. Therefore, we will go down from 74% to about 61%.
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