‘We have built a dis­tinct po­si­tion­ing in ICIC space’

The Hindu Business Line - - NEWS - RASHMI PRATAP

Mahin­dra Lifes­paces, the real es­tate arm of the Mahin­dra Group, has de­vel­oped a niche busi­ness seg­ment — in­te­grated cities and in­dus­trial clus­ters (ICIC). In a chat with Busi­nessLine, com­pany’s Man­ag­ing Di­rec­tor and CEO Sangeeta Prasad spoke about the po­ten­tial for ICIC busi­ness, why the res­i­den­tial seg­ment will con­tinue to be a fo­cus area and how RERA has turned con­straints into op­por­tu­ni­ties for the com­pany.

Ex­cerpts:

You are the only panIn­dia player in the ICIC space. What makes this seg­ment at­trac­tive?

There is a huge po­ten­tial de­mand for in­te­grated cities and in­dus­trial clus­ters, with a shift in the cen­tre of grav­ity. Peo­ple are mov­ing to out­skirts and we have built a dis­tinct po­si­tion­ing for our­selves in that space. What we of­fer is not just the land but reli- abil­ity and cer­tainty with all the ap­provals and plug and play fa­cil­i­ties. So our cus­tomers’ go-to-mar­ket is faster than com­pe­ti­tion. Here they come and fo­cus on their busi­ness in­stead of wor­ry­ing about clear­ances or putting up a sewage treat­ment plant. This has helped us get top com­pa­nies as clients in our fa­cil­i­ties.

Why did you foray into smaller in­dus­trial clus­ters seg­ment last year?

World City (in Chennai and Jaipur) type of in­te­grated projects can be done only if the State gov­ern­ment is a part­ner and land is given at an equitable price. But there is also a de­mand for smaller clus­ters. So we went ahead with projects in Chennai and Ahmedabad un­der the ori­gins brand for smaller clus­ters . We are very choosy about our anchor cus­tomers. Your anchor cus­tomer will de­fine who you are. We are in the

Obusi­ness of cre­at­ing jobs and in­vest­ment and not in the busi­ness of selling land.

How does your other busi­ness – res­i­den­tial – com­pare with the ICIC busi­ness?

ICIC busi­ness is not a repet­i­tive busi­ness. It is lumpy. If you com­pare, res­i­den­tial gives more rev­enues, but ICIC’s con­tri­bu­tion to prof­its is more. It is a very dis­tinct busi­ness and con­trib­utes as prof­its and not topline.

Does it mean that ICIC, be­ing more prof­itable, will be a big­ger fo­cus area for you?

The way we have struc­tured the busi­ness, each one is not mu­tu­ally ex­clu­sive. We will eval­u­ate both. The op­por­tu­nity is hu­mon­gous in the res­i­den­tial seg­ment also. We have brand, we have ac­cess to cap­i­tal and the reg­u­la­tory en­vi­ron­ment has changed for the bet­ter for re­spon­si­ble play­ers like us. Im­ple­men­ta­tion of RERA and Ind AS 115 is or­gan­i­cally fit­ting into the way we do busi­ness. What was a lim­i­ta­tion for us ear­lier is an op­por­tu­nity for us now. We have only just be­gun.

What are these op­por­tu­ni­ties in the changed en­vi­ron­ment?

There are op­por­tu­ni­ties in the distressed as­sets space. We can look at joint devel­op­ment. But we are very cau­tious as we can’t let the brand get af­fected. My pri­or­i­ties are brand, reg­u­la­tory pro­cesses and our prod­uct.

The be­lief is that your res­i­den­tial launches have not kept pace with the mar­ket...

We have enough and more to do in get­ting more launches in the mar­ket. We are set­ting up a pipe­line of land and launches. For me, the chal­lenge is that I need more prod­ucts in the mar­ket. Es­pe­cially in Mum­bai, there have been projects stuck up due to var­i­ous is­sues like reg­u­la­tory un­cer­tainty and that has af­fected us. But we are mov­ing ahead with launches in other cities like Pune. The res­i­den­tial busi­ness has huge po­ten­tial and we are com­mit­ted to re­al­is­ing this po­ten­tial.

ZY SANGEETA PRASAD Man­ag­ing Di­rec­tor and CEO, Mahin­dra Lifes­pace

The way we have struc­tured the busi­ness, each one is not mu­tu­ally ex­clu­sive. We will eval­u­ate both. The op­por­tu­nity is hu­mon­gous in the res­i­den­tial seg­ment also. We have brand, we have ac­cess to cap­i­tal and the reg­u­la­tory en­vi­ron­ment has changed for the bet­ter for re­spon­si­ble play­ers like us

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