DB Realty, which had hit a rough patch over the last two years, with some of its promoters allegedly involved in the multi-crore 2G scam, is now looking to launch 5 million square feet of prime residential space in Mumbai in the next three to four months. The company has a sales booking horizon of around R4,000 crore for 2013-2014. It plans to start bookings on four projects by October to cash in on the momentum around the festive season. These include Orchid Heights and Orchid Turf View in Mahalaxmi, a redevelopment project Paradise in Bandra (East), and a yet-to-be-named project in Andheri, near the international airport.
Apart from the 5 million square feet that DB is looking to launch in the immediate horizon, it has another 10.2 million square feet of ongoing projects in the pipeline.
Vipul Bansal, ceo, DB Realty, told FE that the primary challenge for the company is getting timely approvals. DB Realty had debt of around R500 crore at the end of March, 2013.
?The key for us is progress on the approval front. Largely, our challenge is that apart from these four projects, the other 25 have to come online as soon as possible, so that we generate cash. We have been collecting R150-200 crore of cash every quarter and that is what we need,” says Bansal.
Bansal says the four projects have a sales value potential in excess of R20,000 crore, which the company will be garnering over the next four to five years, a time period over which these projects are to be delivered.
Of the four projects, DB had launched Turf and Heights in 2011 as well. However, Bansal says that they were launched two years back without approvals, and with the change in the approval process in Mumbai and the change in development control rules, the plans had to be revised.
“Some historical sales had happened on the project ? they are existing customers, they will get the same areas. A small portion was sold at that time, which is less than 10%,” he said.
As for raising funds, Bansal says that with its land assets paid for, the company will be taking only construction finance for projects once they are at the approval stage, to make up for the leaner sales season. It has raised R750 crore on that count in the last six months, he said.
Bansal also clarified that the Central Bureau of Investigation?s (CBI) asking the Enforcement Directorate to attach properties of DB Realty in 2011, with its promoters? alleged involvement in the 2G scam, has no bearing on DB Realty’s day-to-day business. “Those were minor assets. The projects we are talking about are under DB Realty, which has got nothing to do with the 2G scam,” he said.