Realty firm Godrej Properties to invest over $1 bn

"We sold 9,345 homes at an average of over 25 homes per day," said executive chairman Pirojsha Godrej

New Delhi: Realty firm Godrej Properties plans to invest more than $1 billion over the next couple of years to acquire and develop new projects as part of its target to achieve higher growth, its executive chairman Pirojsha Godrej has said.

Addressing shareholders in the company’s annual report, he highlighted that, for the first time, Godrej Properties was “India’s largest developer by the value and volume of sales it achieved.” The company’s sales bookings grew 14 per cent to a record Rs 6,725 crore last fiscal despite adverse impact of the Covid pandemic, surpassing nearly Rs 6,000 crore clocked by Macrotech Developers (erstwhile Lodha Developers.).

“We sold 9,345 homes at an average of over 25 homes per day,” said Pirojsha. The executive chairman highlighted that the company in March raised Rs 3,750 crore through Qualified Institutional Placement (QIP) process. “Our QIP in March raised Rs 3,750 crore, and allowed your company to end the year with a net cash balance sheet,” he said.

“The equity we have raised and the flexibility this provides our balance sheet will allow us to invest over $ one billion into new projects over the next couple of years,” said Pirojsha. This will be substantially more than what the company has invested at any time in its past, he said, adding that the investment will allow the company to significantly accelerate its growth ambitions.

“We expect to see this play a role both in ensuring we scale our revenues rapidly and also continue to improve the margin profile of our business by improving GPL’s economic interest in each project,” Pirojsha said. To expand its business, GPL buys land outright from the market and also partners with land owners to add more projects to its portfolio for future development.
Pirojsha said the company remains committed to two medium-term goals of consistently being among the leading developers by the value of housing sales in each of its focus markets and achieving a Return on Equity (RoE) in excess of 20 per cent.

GPL focuses majorly on four markets– Mumbai, Pune, Bengaluru and Delhi-NCR. It sold properties of more than Rs 1,300 crore in each of the four focus markets last fiscal. Pirojsha said the company posted loss during FY’21 and the ROEs would remain muted this fiscal.

“However, we remain confident that the steps we have taken to strengthen your company’s balance sheet, enhance its project pipeline, and build its execution capabilities will help us ensure high returns, lower risk, and strong growth,” he told shareholders. The company expects to see a meaningful uptick in reported earnings from next year, he added.

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