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00:00We spoke to Amit Jain, the MD and Chairman of Arcade Developers post their listings
00:05and my colleague Anushi spoke to Mr. Amit Jain and here's a slice of it.
00:11We are into residential real estate markets in MMR region and we have projects across
00:18western suburbs as well as eastern suburbs and we are looking at new markets of Hane as well.
00:24Currently we are having 10 ongoing projects and broadly it is a mix of new projects as well
00:31redevelopment projects. So in western suburbs where there is scarcity of land parcels we are
00:37into redevelopment projects and in eastern suburbs we have new land projects which are acquired by
00:45the company on outright basis. Currently we have projects equivalent to around 4000 crore projects
00:56which we are targeting to complete in around three years. So this year we are looking at
01:01a 1000 crore sale and on a year-on-year basis we intend to target a CABR of 25 to 30 percent.
01:09Okay, so a 1000 crore of pre-sales that you target for this year and a 25 percent of growth
01:15going forward for the business. Mr. Jain, give a sense of the proceeds that you're going to be
01:21using forward from the IPO now. You're going to be acquiring more land for other projects as well
01:28and also to develop some of the key ongoing projects. Can you highlight some of the key
01:33ongoing projects that you currently have and what's the outlook for these as we move forward?
01:39Sir, our initial public offering is for 430 crore out of which we have raised 20 crore by
01:46the means of pre-IPO and 410 crore was the fresh issue initial public offering. The objects of
01:54this IPO broadly is two categories. One is to suffice funds for approvals of three of our
02:02ongoing projects and the second main object is towards payment of fresh plans to be acquired for
02:11development. The three ongoing projects where funds will be going for approvals are Arcade Nest,
02:18Arcade Pearl and Arcade Eden. Nest is a new project in Mulu and Pearl and Eden are redevelopment
02:26projects in Vile Parle and Bala. This is where the funds are going to be acquired.
02:33All right, that's fair to say. 250 crore is for the approvals and the remaining
02:38say 150 to 180 crore is for general corporate purpose and fresh land acquisition.
02:45So, Mr. Jain, you mentioned that most of the projects that we are seeing are for the MMR
02:49region and Thane being a new market that you're looking at. Any scope for beyond expansion,
02:54beyond these areas that we are looking at? Are we targeting any new cities as we move
02:59forward with the business in the next two to three years?
03:02Bombay is a very mature market which makes it safer, you know, and the demand for properties
03:08in Bombay is insatiable. So, currently we are having, we see enough potential in Bombay to
03:15explode and we find it very safe here. Okay, so the focus will continue to remain on the
03:22MMR region for now. Moving on to the next question, now you've given a brief sense of
03:27how the pre-sales number will continue to look forward. You've seen about a thousand
03:31crore of a figure. Want to understand on to the collection side, if you had to look at FY23 to
03:3724 side, you reported about a significant jump in your collections. Can you give us an outline,
03:42what is the type of collections, the cash flows that one should be expecting for the next two to
03:47three years for the business? Again, our cash flows are broadly similar or parallel to pre-sales
03:55figures because we believe in selling only as good as the progress of the project is. So,
04:01if a project is completed 50% in terms of construction progress, remodeling,
04:07due to it that our sales are also 50%. So, the collections are broadly similar to the
04:13pre-sales figure plus or minus 10%. All right, so collections will remain in line with the
04:20pre-sales number as you speak at. Now, I wanted to understand your perspective on whether when
04:26you're deciding between a development project on your own land versus a redevelopment project,
04:32what is the kind of outlook that you have when selecting between the two across a region?
04:37So, land definitely is the first preferred option because like land is kind of personal, you know,
04:44the returns in new development projects is much more than the redevelopment project.
04:52Redevelopment projects on the other side are lesser capital intensive, but they are equally
04:56more competitive. Fresh development projects are more capital intensive, but then the returns are
05:04are much better than redevelopment projects. So, first preference is always fresh projects,
05:11but then we also know that there is a scarcity of land in Mumbai. So, redevelopment becomes
05:17inevitably a mandatory option, you know, to venture into if you are required to be present
05:25in Mumbai. Most of the western suburb lands have become extinct. So, redevelopment is the future.
05:33Mr. Jain, you mentioned about scarcity of land in Mumbai. Can you expand more on what is the
05:38industry level perspective if you are to just take MMR as a region, whether it be the pricing trends
05:44or the inventory levels as we speak? You know, even if you look at the first quarter of this
05:48year, there have been a lack of launches as compared to last year. Want to just understand
05:54your industry-wide perspective on this market? No, you know, generally we've always seen growth
06:01in terms of influx of people is resultant into demand growth. The first quarter of the year,
06:09the first financial quarter that we are talking is normally a little lump, but then as we enter
06:16second and third quarters where we see festive, which is the demand always fixed up.
06:21All right. And now coming to my final question is on the debt levels. I want to understand what
06:27are your current debt levels if we are to look at the debt to equity ratio from FY22-23, it has
06:34gone down significantly to about 0.2 and this was from the 0.7x level. Are we expected to continue to
06:41stay at these levels or we can see a… Yes, our company is very sensitive to debt. This 0.2
06:48also is internal promoter that there is zero external debt currently. Like we've seen people
06:55suffer a lot who are exposed to debt, you know, their major cash flows goes towards the interest
07:01payment and which effectively converts into a red balance sheet. So we are very sensitive to debt
07:09and that is why you will not see bigger debt in our books. Okay. And with this added capital,
07:15I don't see the need also to get into a debt trap. All right. That was Mr. Amit Jain from
07:23Arkit Developers telling us an outlook for the company. And if you check the listing,
07:30since listing it's gained around 24%, but today it's down around 4%. So it did list at a premium
07:35of 37%, but we are seeing some profit booking today and it's down around 4% as we speak.