Sobha Developers plans to develop over 11 million sq.ft during this fiscal at an estimated project cost of Rs 2,500 crore. Bank funding for some of these projects has already been tied up, Mr J.C. Sharma, Managing Director, Sobha Developers, told Business Line. “Our sales realisation in 2010-11 crossed Rs 1,000 crore, with an average realisation of over Rs 4,000 per sq.ft. We have generated positive cash flow in the last fiscal thereby reducing our debt significantly,” he said. The company's debt, which was at Rs 1,450 crore at the beginning of last fiscal, has been reduced to Rs 1,250 crore during 2010-11 and “targets of debt reduction were achieved without doing land monetisation as much as we were expected to do,” Mr Sharma said. The company, which has a land bank of 2,800 acres now, monetised land for about Rs 150 crore in 2010-11.

The targeted debt equity ratio is 0.5-0.6 for 2011-12, he said, adding that in absolute terms, the company would bring it down to Rs 1,000 crore.

To expand presence

Besides new launches in the four cities where it already has presence — Bangalore, Pune, Coimbatore and Thrissur — the company also plans to enter the National Capital Region, Chennai and Mysore. “We plan to enter Mysore this month and NCR next month, while the Chennai launch is slated in the next two-three months,” said Mr Sharma.

Of the 11 million sq.ft planned this year, over 90 per cent would be in the residential segment. “For the projects to be immediately launched, land cost has been paid for and bank funding has been tied up,” he added.

With these new launches, Mr Sharma expected good growth in 2011-12. The company's sales went up by over 50 per cent during the last fiscal, and considering the product mix of new launches “our average realisation should further improve this year,” he said.

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