8/2/2014 Godrej Properties will be our fastest growing biz: Adi Godrej | Business Line

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Business Line
Godrej Properties will be our fastest growing biz: Adi Godrej
R. Yegya Narayanan
A file photo of Adi Godrej.
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Coimbatore, Nov 26:
Godrej Properties Ltd will emerge the fastest growing business of the Godrej Group and the Rs 700 crore rights
issue has increased its ability to launch new projects in important markets, according to Godrej Group Chairman, Adi
Godrej.
Speaking at an earnings conference call of Godrej Industries Ltd, transcript of which was provided to the stock
exchanges, he said Godrej Properties rights issue was the largest in the first half of the current fiscal.
He said this mobilisation has, apart from strengthening its balance sheet, enhanced the companys ability to
continue to add value accretive new projects in key markets.
Right time for new products
Adi Godrej, reaffirming his view, said that Godrej Properties will be our fastest growing business. He said unlike
other businesses like that of Godrej Consumer Products or Godrej Agrovet, the Group need not be worried about
market share or growth of Godrej Properties. He felt that the present time was the most appropriate time to launch
new projects since the cost of getting into new projects at this time will be reasonable. At present, many developers
and land owners were under liquidity pressure, providing the company with strong opportunity to add new
projects at attractive terms.
He said it was this growth prospect of Godrej Properties that made the company to raise capital and opt for the rights
issue route rather than going for any other instrument like QIP, since we did not want the promoter shareholding to
dilute. This was the reason behind Godrej Industries subscribing to the rights issue and he expected this to pay a
good dividend to the company in the future.
Answering a query on when GPLs return on net worth would start to improve, Pirojsha Godrej, MD and CEO, Godrej
Properties, pointed out that it took time for the benefits of new real estate projects to kick in and reflect on the
company balance sheet. The company has now about 40 projects, over half of which were added in the last 30
months. He was confident of these investments becoming very, very ROCE accretive but with a time lag.
Commercial projects
He felt that another reason was that in some older commercial projects the company had lost in much more capital
than we have intended because of poor performance of the commercial markets in places like Kolkata and
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Chandigarh. He said we have learnt the lessons from that and was making the best efforts to exit these commercial
projects which however was taking time.
Pirojsha Godrej said the company has got Rs 600 crore to Rs 700 crore locked in, in three projects in Chandigarh
and Kolkata. But he felt that the balance sheet of GPL is the strongest that it has been in the last many years. The
net debt level of Rs 1,200 crore as at the end of September 2013 was the lowest in the past two or three years and the
benefits of the projects launched would start reflecting on the balance sheet in the coming quarters.
On the prospects of the nearly 147 acre township project of GPL at Panvel in Navi Mumbai, he said the Panvel Airport
would be a huge boon to the project. (The Navi Mumbai airport project is facing opposition from some villagers and
it is reported Maharashtra Government is looking at reclaimed land from the sea as an alternative for land
acquisition). GPL was working on the design and approval process for the township project which he was confident of
bringing ` to the market very soon.
The shares of GPL closed at Rs 177.25, down by Rs 3.50, on the BSE today.
(This article was published on November 26, 2013)