Tata Housing, a unit of Tata Sons, is advancing its plans to build 15,000 low-cost dwelling units by two years. Besides, it should add 300 more houses in its Mumbai project to take the advantage of demand for such homes, a top company official said.Tata Housing had earlier planned to develop 1,000 houses under the brand 'Shubh Griha' in Bhoisar, a distant suburb of Mumbai, priced at Rs 3.9-6.7 lakh.
Real estate companies are now going to the other extreme and falling over each other to offer affordable housing at a price range of Rs 500,000 to Rs 50 lakhs (Rs 5 million). The varied pricing is a function of affordability being a relative term, depending on the location. For instance, a Rs 50- lakh (Rs 5-million) apartment in Mumbai is considered affordable housing. In a city like Nagpur, the same price will qualify for premium housing.
While a number of players invested more in Indian companies, another set exited the market, making profits after March. The companies that invested included Saif Partners, which made a $24 million investment in Network18, and Times Private Treaties, which acquired 12 per cent in Jiny & Jony (for an undisclosed sum), according to data with analysts and brokerage firms.
The Tata group is strengthening the management super-structure within its group companies by extending the post of vice-chairman to three more companies - Tata Motors, Tata Steel and Tata Consultancy Services.
With confidence creeping back into the market place and rentals down up to 50 per cent, large retailers are back to drawing up aggressive growth plans. In the next one year, Aditya Birla Retail, Bharti Enterprises, Reliance Retail, Trent, Mahindra Retail and others hope to open new stores spread over five million square feet.
Speculators often leveraged volume discounts on property purchases to re-sell them at prices lower than those available to individual buyers. This created problems for realtors when demand slowed, since it put pressure on them to take a hit on margins and lower prices still further. The lock-ins are expected to be introduced mostly for mid-income projects that offer prices 20 to 30 per cent below the market and, therefore, attract more undercutting from bulk discount buyers.
Sunil Mittal's plan to merge his Bharti Airtel - India's biggest mobile-phone operator -with South Africa's MTN, coupled with the company's 3G foray, is likely to put pressure on its balance sheet, as the estimated cash requirement would be Rs 40,475 crore (Rs 404.75 billion) in this fiscal.
DLF, Unitech, HDIL & Puravankara line up 60 million square feet of new launches. This is more than double the sales bookings in the past financial year.
Developers in the past year have restructured debt, sold non-core assets and tweaked the product mix, helping push up sales. This has encouraged investors to buy stocks of real estate companies and motivate analysts to revise price targets and upgrade the outlook on the sector. Reflecting the positive sentiment, the Bombay Stock Exchange Realty Index rose 58 per cent in the past month, outpacing the benchmark Sensitive index's gain of 27 per cent.
Developers who are launching new projects are opting for this route, as they need not pay the entire amount in one lot and owners need not forego the potential rise in value. As much as 70 per cent of land deals in the country take place through this model now, against 40-45 per cent a couple of years earlier, say property consultants.
Developers such as DLF, Unitech and Orbit are in the process of raising around Rs 5,000 crore (Rs 50 billion) in the current fiscal after they rolled over nearly Rs 9,000 crore (Rs 90 billion) debt subsequent to the Reserve Bank of India (RBI) allowing banks to restructure loans to developers.
A company executive, who did not want to be identified, said the combined debt of RIL and its subsidiary, Reliance Petroleum, which is being merged with it, would be brought down to around Rs 57,000 crore this year from Rs 72,000 crore at present.
Jamshedpur gave birth to Telco (now Tata Motors) which has just launched the low-cost Nano; Jamshedpur, according to the 35-year old Tata Housing Development Company managing director Brotin Banerjee, is what inspired Tata Housing to launch its Shubh Griha low-cost housing project in Mumbai.
Tata Housing Development Company, a unit of Tata Sons, expects to earn Rs 700 crore (Rs 7 billion) in revenue from low-cost housing in the next four years, a top company official has said.
In May last year, Peninsula forayed into the hospitality sector with a joint venture with textile maker and real estate developer, Arrow Webtex. The JV planned to build hotels in Mumbai, Pune, Nagpur, Nasik and Kolhapur in Maharashtra. There were also plans to develop hotels in Ahmedabad, Surat, Jamnagar, Mundra port, Goa and Kerala.
In addition, it is banking on Rs 20 billion of additional inflows from group company DLF Assets. The move follows 33 per cent growth in DLF's gross debt to Rs 163.58 billion at the end of March 2009 from Rs 122.77 billion a year ago. In addition, DLF's revenues fell 28 per cent to Rs 105.41 billion as home buyers deferred purchases and it offered discounts to lure buyers. As a result, its revenues were hit to the tune of Rs 6.88 billion.
Store 99, which sells apparels, accessories, cutlery and other items for Rs 99 or below in its 14 stores in North India, is buying merchandise from firms that went into liquidation in the US and Europe to keep prices low, said Shiraz M Javed, a director of the group.
It will also close 30 unviable stores. The company's move comes after its net loss widened to Rs 141.2 crore in the March-ended quarter, owing to mounting losses in apparels. The loss was Rs 82.2 crore in the apparel business, against a loss of Rs 4.44 crore in the corresponding quarter of the previous financial year.
EGF, managed by the Capital Group, bought 16.13 million shares, or a 1.02 per cent stake, in RIL from the open market in the March-ended quarter. When share prices were down in the fourth quarter, Life Insurance Corporation added 2.4 million shares of RIL to its kitty, taking its stake to 5.52 per cent. The purchase would have cost LIC over Rs 250 crore. LIC had also bought over six million shares of RIL in the third quarter, at an investment of around Rs 800 crore.
The takeover battle for United States copper miner Asarco continues to rage, as its estranged parent Grupo Mexico has offered $1.3 billion to counter Sterlite Industries' offer for the second time.
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