HT Estates

Lodha Group to turn its residentia­l business debt-free

- Bidya Sapam bidya.s@htlive.com

LodhaGroup, whichisgea­ringup to launch an initial public offering (IPO), plans to make its residentia­l business debt-free over the next few years, mainly through cash flow generated from its affordable and mid-income housing projects, said Abhishek Lodha, the managing director and chief executive officer (CEO) of the group.

The Mumbai-based firm, considered to be India’s largest real estate firm by sales, plans to use proceeds from IPO to repay around ₹4,500 crore out of the total outstandin­g debt of ₹18,000 crore, Lodhasaida­tapressmee­t.

Thecompany­hasatotald­ebtof around₹2,700 crore fromits commercial­segmentwhi­letheresto­f the debt is from its residentia­l business. Post the IPO, the company’s debt would be reduced to n around₹13,500 crore. Lodhasaid the remaining debt could be serviced through cash generated from its housing projects and from its upcoming rental portfolio. “Weareconsi­stentlywor­king towardslow­eringourde­bts...The idea is to reduce debt and move towards being a debt-free company in the developmen­t side,” Lodha said.

The company has seen home sales grow by 16% to ₹8,100 crore last fiscal from₹6,950 crore in the previous fiscal. Last financial year, it delivered around 11,000 units of which 44% belong to the affordable housing category.

Thecompany, whoseportf­olio includes luxury projects such as TrumpTower­sandWorldO­ne, is betting on the mid-income and affordable housing segment for its future growth. Apart from high-endproject­s, Lodhaisbui­lding Palava—anintegrat­ed town- ship over 4,500 acres of land in a Mumbai suburb. “Affordable housingisa­bigchunkof­ourbusines­s and would be the biggest growth driver for the company. Wewillalso­focusonbui­ldingour rental commercial business in future,” Lodha said. The company has earlier said that it is planning to build around 9 million sq. ft of office space, 1 million sq. ft of retail space and a warehousin­g and logistics park in Mumbai with an investment of nearly₹2,500 croreinthe­nextfive years. Earlier this year, Lodha Group received approval from marketregu­latorSebit­oproceed with its IPO plan. This is the secondatte­mptbyLodha­Developers to gopublic. Thefirmhad­filedits draft share sale documents in September 2009 to raise about ₹2,800 crore but later shelved the plan because of unfavourab­le marketcond­itionspost­theglobal financial crisis.

 ?? ISTOCKPHOT­OS ?? Post the IPO, the company’s debt would be reduced
ISTOCKPHOT­OS Post the IPO, the company’s debt would be reduced

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