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HDIL: Expect to complete 8-9 m sq ft of projects this year; All of FY 08 revenues to come from Mumbai region

Tuesday, July 24, 2007

Sarang Wadhwan of HDIL says that the company expects to complete 8-9 m sq ft of projects this year. All of the FY 08 earnings of the company will come from the Mumbai Metropolitan region. On the expected fall in property prices after their large run-up, Wadhwan says that any slowdown in property prices will hit Mumbai last. They don't foresee any large slippage in Mumbai property prices.

Almost 15% of the total portfolio from Slum Rehabilitation Scheme (SRS) projects. SRS margins stood at 60-75%, of which Bandra SRS has the higher margins. The company also has good land bank in the Vasai-Virara belt. Vasai, Virar rates are at Rs 2,000-2,500/sq ft. Wadhwan adds that it is not a low quality land bank. He feels that Vasai will continue to grow.

Real Estate Developer Housing Development and Infrastructure (HDIL) listed on the bourses today at Rs 550. The issue price was fixed at Rs 500 per share. HDIL also started trading in F&O and the lot size will be of 400 shares. Analysts say that the stock is expected to list at around Rs 535-550 band. The company had come with an IPO of 29.70 million shares at a price band of Rs 430-500. The issue was subscribed 6.6 times.

As on May 31, the company's developable land reserve was 112.20 million sq ft, of which the company itself owns 78.30 million sq ft. However, 82.8% of land reserves are in Mumbai Metropolitan region alone. The company's revenue for 2006-07 (Apr-Mar) stood at 12.04 bln rupees and profit for the year was Rs 5.48 billion.

The company has nearly 45.5 million sq ft under construction and an additional 66.6 million sq ft in various stages of planning. Much of this developable area has come from the company's slum rehabilitation activities, under which a builder gets to build additional space in return for the free housing given to slum dwellers. The company derives nearly 15% of its business from the slum rehabilitation schemes.

Kotak Mahindra Capital., Enam Financial Consultants Pvt Ltd, and ICICI Securities are lead managers to the issue.

Posted by FR at 10:01 PM  

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