IVRCL to buy land in Noida for Rs 228 cr

Construction firm IVRCL Infrastructures & Projects said it will pay Rs 228 crore ($52 million) for a plot in Noida, near New Delhi. The company's shares rose as much as 3 per cent.

IVRCL won an allotment of 33 acres in Noida to construct 2.9 million square feet of residential space, according to a statement issued by the Hyderabad-based company to the Bombay Stock Exchange today.

It will spend Rs 800 crore to build 1,800 units and will start construction in August, the company said.

The infrastructure major is seeking to tap the rising demand for homes as faster pace of economic growth is increasing incomes for the country's more than 1.1 billion people. The Asian Development Bank estimates India will need as many as 10 million new housing units a year by 2030.

Shares of IVRCL gained Rs 8.4 (3 per cent) to Rs 287.5 at 11:30am local time on the BSE. The project is expected to generate Rs 1007 crore of revenue over three to four years, IVRCL said.

India's real-estate industry, estimated at about $1200 crore, is growing at 30 per cent a year, according to an Ernst & Young study for the Federation of Indian Chambers of Commerce & Industry.

India, Asia's fourth-biggest economy, expanded an average 8.6 per cent since 2003, the quickest pace in the country's history since independence in 1947, putting more disposable income in the hands of its citizens to spend on homes and cars.

Wages in India may increase an average 14.5 per cent in 2007, the fastest among Asian nations, from 14.4 per cent last year, according to consultant Hewitt Associates.

Noida is home to the software development centres of Adobe Systems and Perot Systems. HCL Technologies, India's fifth-biggest software developer, is based in Noida.