Lodha Developers, which tell recently focused on the premium segment, is now banking big on affordable housing with three projects in the Mumbai Metropolitan Region (MMR). Two of the projects - Amara and Upper Thane - are in Thane and the third development in the township of Palava is the biggest of the three. Amara is being constructed in a phased manner to sell around 8,500 units as compared to about 11,000 residences in Upper Thane.

While the two projects in Thane were launched last year, Palava is being sold in phases for a decade now. The realtor, that may soon hit markets to raise around Rs 5,500 crore from its initial public offering (IPO), has so far sold 19,000 apartments under the first phase of Palava. The process is underway to give possession for another 11,000 homes in the second phase, which has a total of around 60,000 dwellings.

The third phase, which is yet to be conceptualised, will have a mix of commercial and residential portfolio and will be spread across 350 million square feet. The first and second phases have an area of 16 million sq ft and 50 million sq ft, respectively.

“At the moment, there are a lakh people residing in Palava and we plan to develop it in phases, and eventually, there may be 20 lakh people residing in Palava,” said managing director and chief executive officer Abhishek Lodha.

It is affordable housing that is driving Lodha Developers business as close to 80% of the homes being sold are in this segment. “With the recent Credit Linked Subsidy Scheme announced by the government on affordable housing, some of our projects qualify for the benefits. A buyer gets subsidy and we get tax holiday for a period of five years,” said an executive from the company.

The company, which has enough land bank to maintain a continuous supply of affordable homes for another at least seven to eight years, also has an adequate inventory in central Mumbai to sell premium apartments for another three-and-a-half-years.

Of the 4,450 acre land that the Mumbai-based developer has, close to 4,000 acre is for Palava and the balance is spread across different areas in the MMR.

On the upcoming IPO, Lodha said, “The idea is to reduce debt and move towards a debt-free company in the development business.” The company has a debt of about Rs 18,000 crore, which is expected to come down by Rs 4,500 crore post the public issue.

As of last financial year, the company generated Rs 9,700 crore in revenue and made a net profit of Rs 790 crore.

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As reported earlier by DNA Money, the company is also looking at expanding its commercial and rental portfolio to eventually become debt-free.

 

Source: DNA Money