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Sunday, May 19, 2013

Godrej Prop readying Rs 700 crore rights issue

This story first appeared in DNA Money edition on Friday, May 10, 2013.

Godrej Properties is planning a Rs 700 crore rights issue to finance its existing and new projects across the country. While the pricing is yet to be decided, the company hopes to wrap up the issue by September. Pirojsha Godrej, managing director and CEO, Godrej Properties, said the board has approved the issue. “This issue will allow us to create necessary funding, thereby growing the portfolio very rapidly without requiring in any way to stretch our balance sheet,” he said. The company’s debt currently stands at a little under Rs 1,500 crore.

The company’s revenues in the January-March quarter of 2012-13 declined 16% to Rs 313.9 crore a year earlier. Operating profit slipped 1.56% on-year to Rs 100.4 crore though net profit grew 33.66% to Rs 53.2 crore. For the full 2012-13, revenues, bookings and net profit went up significantly by 28%, 71% and 41%, respectively, in comparison to fiscal 2012.

“Despite poor macro economic environment and relative underperformance of the real estate sector this year, our Ebitda increased 43%. In terms of bookings, we crossed $500 million in new sales,” said Godrej.

While the last fiscal saw the realtor pull off a total of 13 launches in six cities across the country, the management is confident of rolling out 15-20 new projects this fiscal. The new launches will include phases of existing projects.

Godrej said the company registered good traction in major target markets of NCR-Gurgaon (Summit), Mumbai (Platinum at Vikhroli) and Bangalore this fiscal. “At Vikhroli, we increased prices by around 40% year on year despite the market not being that strong. We sold about 400,000 sq ft during the year at E City Bangalore. Around 1 million sq ft of sales were made at the Gurgaon project in a single day,” said Godrej, who sees prices sustaining due to inflation and rising input costs for real estate companies.

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