After successfully dabbling in organised retail in 2006, Mukesh Ambani, chairman of India's largest private sector company, Reliance Industries (RIL), has now set his eyes on no-frills, low-cost housing.
The initiative, still on the drawing board, could be kicked off by 2010. An RIL official said the company would do large projects and at multiple locations.
"RIL has deep pockets and excellent execution skills. It has executed two large projects like the Jamnagar refinery and the KG-D6 basin in a record time. Another such large project is only obvious for the company to get into," said a source close to the development.
RIL holds a land bank of 5,000 hectares in Haryana through Reliance Ventures, a subsidiary of RIL created by forming a joint venture with Haryana State Industrial Investment Development Corporation and over 4,840 hectares through the Navi Mumbai SEZ, in association with Cidco (the Maharashtra government's industrial and township development arm).
"RIL is sitting on a huge land bank with regard to its special economic zones in various locations. It could be putting that to commercial use for mega housing projects in the no-frills category," said an analyst from a Mumbai-based broking firm who tracks RIL closely.
Low-cost housing has become the new mantra for realty players across the country. Sector analysts say the global economic recession ended a four-year property boom in India, largely driven by the luxury-housing segment, which resulted in a nearly three-fold increase in residential prices in major cities.
"Entry of corporate houses like RIL will be good for the market, as it will uplift the real estate sector into an industry. Every business house that enters the sector, be it Godrej, Mahindra, Piramal, Tata and now RIL, will help in making the procedures in the sector more transparent," said Rajeev Talwar, Group Executive Director, DLF.
Earlier this year, the Tata Group's unlisted firm, Tata Housing Development Company, said it would invest up to Rs 100 crore in a 1,200-unit township at Boisar, on the outskirts of Mumbai, and would sell apartments at prices ranging between Rs 3.9 lakh and Rs 6.7 lakh. The company aims to build up to 15,000 low-cost homes over the next four years across several cities, including Mumbai, Delhi and Bangalore.
