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Fashion apparel exporter Bhartiya International has entered the real estate sector by launching a Rs 1,400-crore project in Bangalore. The BSE-listed exporter of garments and leather goods plans to fund the project through a mix of internal accruals and debt.
The promoters of the Delhi-based company have a land bank of 125 acres in Bangalore near the Hebbal Flyover, and plan to develop a mix-use project that will have residential buildings, a mall, few hotels, a school and a hospital along with an IT SEZ.
The company has already raised Rs 200 crore for the first phase of the project, mainly residential, from a consortium of banks including the Corporation Bank and Bank of Baroda, said Ajay Malhotra, CFO, Bhartiya International.
On why the company entered real estate, Malhotra said there was huge demand of residential projects and the company wanted to monetise its land assets.
“The banks have approved up to Rs 700 crore for the project. But we don’t think we will need more debt. We have sold about 400 units in the first phase. The second phased construction has started, which we hope to complete over the next 3-4 years. We will start bookings from the next fiscal for the second phase. We hope to generate about Rs 800 crore in the next three years from the residential units, which will take care of the other constructions,” he added.
Priced between Rs 29 lakh (studio apartment) and Rs 1.5 crore for a three-bedroom flat, the project will have 2,400 residential units in total spread across 17 million sq ft.
For the project, Bhartiya International has floated a separate subsidiary called Buildco, wherein promoter Snehdeep Agarwal and his family hold 44 per cent stake and ILFS has 24 per cent. The rest is owned by the company.
The integrated city will be named as Bhartiya City while the residential unit will be called Nikko Homes.
Malhotra said the financial numbers of the real estate division would start reflecting on the company’s balance sheet in another 3-4 years. The company’s total turnover is about Rs 300 crore, which is slated to double by FY 15.
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