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Big B
"We have 151 million sq ft of developable area."
Pradeep Jain, Chairman, Parsvnath Developers Ltd, talks about
his company and the real-estate market.
Meet the Parsvnath Group, which describes itself as a "buoyant
conglomeration of companies endowed with impeccable foresight,
enviable expertise and innate acumen providing cost-effective
and holistic solutions to the real estate and construction
world". A strong commitment to every project it undertakes,
the use of state-of-the-art technology and involvement from
global architects has helped this group achieve a pan-India
presence and emerge as a favoured, dependable choice among
customers. Today the Parsvnath group is the fourth largest
real estate developer in India, having a net worth of Rs 4,768
crore.
CW speaks to Pradeep Jain, Chairman, Parsvnath Developers
Ltd, to find out more…
You hit the capital market with a public issue of 3,30,38,000
equity shares with a price band of Rs 250-300 per share. Where
does the company plan to deploy the IPO proceeds?
The IPO was planned with a specific list of 11 projects in
mind - proceeds will be dedicated to the development of these
projects. The response to the IPO was overwhelming and it
was oversubscribed 61.84 times.
Tell us a little about your land bank and projects.
In the last financial year, we completed 28 projects (5.83
million sq ft) comprising 12 residential, 10 commercial and
6 DMRC projects. The company now has 151 million sq ft of
developable area, including 4 SEZs with a developable area
of 26 million sq ft. Work has already commenced on 66 million
sq ft and we expect construction work on the rest to start
in the current fiscal. We have a great product mix of various
verticals such as integrated townships, group housing, commercial
areas, malls, multiplexes, IT parks, hotels and SEZs. We are
currently engaged in 100 projects spread across India, from
metros such as Delhi, Bangalore, Chennai and Mumbai to state
capitals like Chandigarh, Ahmedabad, Jaipur, Lucknow, Hyderabad,
Dehradun and Ranchi, and cities like Rajpura, Jamnagar, Indore,
Ujjain, Amritsar and Pune.
Do you think some states are more conducive to real-estate
development than others?
With the government's thrust on infrastructure development
across the country, all states are creating a congenial environment
for real-estate development.
Land and property prices in India have risen sharply in the
past two years as demand has soared in a fast-growing economy.
Has that been a deterring factor in any way?
With so much development all round and new players entering
the field of real-estate development to cater to growing demand,
land prices have gone up. We have had an advantage in this
regard as we could foresee this trend and entered Tier II
and Tier III cities well before other players could plan.
As a result, we have enjoyed the first mover's advantage,
both in terms of getting land cheaper and meeting customer
demand by way of the product and quality.
In the recent past, Parsvnath has been the preferred bidder
in a majority of projects. What has been your cutting edge?
We would term this as our foresight and the vision to assess
the project properly in light of the competition. Our passion
for understanding the real-estate market and over 20 years
of experience in this industry have helped us to take a lead
over others when it comes to bidding for projects.
Would you say the Indian real estate market is heated or
overheated at present?
I wouldn't call it a 'heated' real-estate industry. The fact
remains that this is a natural phenomenon with infrastructure
development all around, coupled with increased buying capacity
of the consumer. The country is moving ahead in a positive
manner and the upward trend as a result of this should continue
for at least a decade.
Which areas in the realty market will see maximum growth?
The improvement in infrastructure across the country has led
to tremendous growth in Tier II and Tier III towns.
All segments - group housing, commercial, retail, integrated
townships, IT parks, hotels - will continue to benefit.
In what direction will you steer your company?
In the coming years, the company plans to increase its footprint
to 20 states and 250 cities and develop retail malls in 200
cities. It is also exploring the possibility of developing
large highway malls, spread across 25 to 100 acres, consisting
of hotels, health spas, entertainment zones, water parks,
large hyper markets, retail, etc. We will continue to increase
our footprint in metros all over the country and engage in
the redevelopment of bus stations on a BOT basis. We will
also make a foray into infrastructural projects on a selective
basis and explore the possibilities of taking up projects
outside India.
(With inputs by E Jayshree Kurup, Editor, Magicbricks.com)
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