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Anant Raj Industries: Research Meet Extracts
May 14, 2010

We recently met up the management of Anant Raj Industries to get an update about the pricing and demand/supply situation prevailing in NCR region. Here are the key excerpts from our meeting.

  • Traditionally, the company derived revenues primarily from leasing out commercial properties which fetch higher rental yields in the range of 10-14%. Although the company plans to follow the "own and lease" model for commercial properties, it has also chalked out strategy to enter the residential segment pretty soon. The company also proposes to launch mass housing projects by the end of the year.

  • The affordable housing projects will be launched in Manesar and Sonepat and the ASPs will be in the range of Rs 1,800 and Rs 2,500 respectively. As the NCR region faces acute land shortage, we believe the planned launches will attract significant buying interest.

  • The company also plans to launch a couple of premium housing projects in the vicinity of Bhagwandas road and Hauz Khas in Delhi. The construction work is expected to be complete within the next 12 months. These are prime locations in Delhi where ASP could be anywhere between Rs 30,000 to 35,000 per sq ft.

  • The company expects to receive rental income of Rs 500 m by the end of this year which should increase significantly to Rs 1,500 m by the next year due to planned commercial launches.

  • The company plans to launch 3-4 m sq ft a year for the next 2-3 years. This should not be a difficult proposition as the company has strong land reserves and is also on an acquisition spree to acquire more provided it meets the specified criteria.

  • The average land cost stands at about Rs 17 bn and is significantly lower than what the other developers have paid to acquire land in similar regions.

  • Based on the above plans, the company expects to garner around Rs 20 bn from residential sales and Rs 2-2.5 bn from rental income by leasing out commercial properties over the next 2-3 years.

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