That first movers don’t always have an advantage is something Lavasa Corp has painfully discovered. The company, a subsidiary of Ajit Gulabchand’s Hindustan Construction Company, had announced plans to build a smart city, arguably India’s first, over a decade ago.
Lavasa, about 60 km from Pune, was planned as an integrated hill city, where residents could live, work, learn and play in harmony with Nature while technology would make the life easier. Purchase of land and infrastructure development began in 2002-2003. Construction began in 2007.
Thus far 11,000 acres of the 23,500 notified by the government have been acquired.
Gulabchand’s HCC owns a 68 per cent stake in Lavasa Corporation with the rest held by the Avantha Group, Venkateshwara Hatcheries and the Maniar family.
The ambitious project has its own dam, town-halls, parks and gardens, post offices and police and fire stations.
The information, communication and technology infrastructure will include telephone, mobile and broadband networks, e-governance and a data centre.
The project, however, ran into trouble in 2010 when the Environment Ministry, citing violations, imposed a stay on construction.
Though the stay was lifted in November 2011 and conditional clearance given for the first phase, the stoppage and subsequent litigation (some ongoing), delayed the project. Meanwhile, it racked up a consolidated debt of ₹3,398 crore (as of March 31, 2014). Some loan/interest payments are overdue.
According to the draft red herring prospectus filed by Lavasa Corp in July to raise ₹750 crore of funds through an IPO, it has leased 1,673 apartments, 513 villas, 135 villa plots and 399 rental housing units. It has also signed MoUs and term sheets for the long-term lease of 113.71 acres by the commercial, institutional, hospitality and social (including education) sectors.