Lodha to invest ₹4,300 crore in construction to boost deliveries

Realty major Lodha Group will invest about ₹4,300 crore this fiscal on construction to boost deliveries of housing units, and plans to launch 8-9 new projects across Mumbai, Pune and London.

The Mumbai-based firm had invested ₹3,700 crore in the last fiscal on construction, and has increased outlay for the 2017-18 fiscal to boost deliveries, said Managing Director Abhishek Lodha.

“We will launch 8-9 projects this financial year, of which 6-7 will be in the Mumbai Metropolitan Region and one each in Pune and London,” he said in an interview.

The investment will be funded largely through internal accruals as the company expects to receive ₹8,000-9,000 crore from customers during this fiscal. The collections from customers stood at ₹7,000 crore during 2016-17.

“During last fiscal, we delivered 7,200 homes. The company is targeting to increase delivery of homes in excess of 8,000 units,” Lodha said.

Lodha Group will focus on the affordable housing sector, which is expected to gain momentum after the government accorded infrastructure status to the segment in the Budget this year.

“We sold 4,000 homes in the affordable category in 2016-17 and are targeting sale of 6,000 low-cost homes this fiscal.”

The infrastructure status to affordable housing will boost availability of cheaper finance for such projects. Besides infra status, the government has offered interest subsidy for prospective home-buyers and relaxed various norms, including built-up area, for developers of low-cost homes.

Lodha Group’s sales bookings rose 30 per cent last fiscal to about ₹8,500 crore on the back of better sales in the domestic market and foray into London.

“Out of the ₹8,500 crore, about ₹7,000-crore sales were from the Indian market, and the rest were from London, where we launched our first project,” Lodha said.

The group’s sales bookings stood at about ₹6,400 crore during the 2015-16 fiscal, all from Indian market, he added.

Lodha said sales were affected during November 2016-January 2017 because of poor demand post-demonetisation.

“Sales bounced back in February and March. We will have to see the sales numbers of April-May to see whether this demand is sustainable,” Lodha said.

He said the group launched its first project in London, ‘Lincoln Square’, last year, and the sales have been good despite the Brexit.

The construction work has started and completion is expected in 2018.

Lodha said the company’s debt is currently around ₹14,000 crore. The overall debt level and the interest cost of debt is expected to reduce.

Lodha Group is currently developing around 45 million sq ft area and has over 30 ongoing projects across London, Mumbai Metropolitan Region, Pune and Hyderabad. It has a land bank of 350 million sq ft for future development.

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