Puravankara, Homex venture to launch 2 msf projects

Puravankara Projects Ltd, the Bangalore-based developer which formed a joint venture with Mexico-based Homex, is planning to undertake development of 2 million square feet (msf) under the venture.

This brand will have projects in the range of Rs 5-12 lakh. The JV is expecting to operate at a margin of 35-40%. Homex builds nearly 1 lakh homes a year.

Puravankara could only sell 0.5 msf last fiscal. It is launching 12 msf this year, which includes 2 projects in Bangalore, relaunch of Windermere in Chennai, and one in Coimbatore.

Though the signing of memorandum of understanding is not exclusive with Homex, the Puravankara management feels it would remain exclusive.

The company has sold 63% of its saleable area (7.79 msf) and is heavily adopting the strategy of completing the project and then selling the property at a better value.

However, analysts remain sceptical of the strategy.
Its subsidiary Provident Housing has sold 70% of its launched products and has completed 18% of its construction.

It is launching a 6 msf project in Bangalore for which it is acquiring 59 acres. The launch is expected in the next two quarters and the land has been nearly tied up. It has even sold 55% of the project it has taken up with its international partner Keppel group in Kolkata.
Puravankara has a debt of Rs 800 crore on its books, of which
it has to pay off Rs 300 crore this year.

It expects the debt to remain at Rs 750-800 crore level for the entire year as it is negotiating with bankers for various instruments.

It does not plan to exercise the QIP route for which it has already taken an enabling resolution.

According to its guidance, Rs 200 crore is expected to be booked every quarter.