Sobha Group to soon enter Mumbai luxury housing market, says founder Menon

Realty firm Sobha Group has chalked out an aggressive expansion plan for its India business and will soon enter the Mumbai luxury housing market with an aim to achieve more than a four-fold jump in annual sale bookings to Rs 30,000 crore in the next 4-5 years, according to its founder PNC Menon.

Sobha Group, which was founded in 1995, has a real estate business in India and Dubai, with plans to soon enter the US property market.

Buoyed by its success in the Dubai real estate market where Sobha Group clocked Rs 35,000 crore worth of sales in 2023, Menon -- the richest person in Oman -- intends to replicate the same in the Indian market in terms of scale of business and quality standards.

Sobha Group's Dubai entity named Sobha Realty has developed a large resort-style luxury township here named 'Sobha Hartland' with complete backward integration to ensure quality. Another township and a few more projects are being constructed here.

"Our India business Sobha Ltd will enter the Mumbai market. I have a dream, we have to show something which India has not seen. We are going to follow the same methodology that we do here. When you do that, it becomes expensive. The cost will go up. The only place in India which can pay is Mumbai," Menon said.

Sobha Ltd, which got listed on the Indian stock exchanges in 2006 and is one of the leading players in South India, is looking at all options to acquire land parcels in the Mumbai region, including outright purchases, joint development with land owners and redevelopment of existing housing societies.

"So what we are trying to do is to pick up some land, build beautifully to the highest international standards. Like what you see here. Because Mumbai can afford to pay, that I have seen," said 76-year-old Menon, Chairman Emeritus of Indian entity Sobha Ltd.

Elaborating on the expansion plan, Ravi Menon, the Chairman of Sobha Ltd, said, "We are looking at entering Mumbai. Because Mumbai, if you look at the market, it has several micro-markets. So we are exploring across. We have no preference as such."

"I think hopefully by next year, mid of next year, we should be able to break ground," he said, adding that the company might do a small project to begin with.

"Hopefully we can replicate the Dubai model, using Mumbai as a city which has a market and can absorb that sort of price," Ravi said.

Both PNC and his son Ravi Menon admitted that the company has been less aggressive in expanding business in India compared to other industry players but asserted that it is ahead in quality development.

"Now, you know, we are not in that game. We are in a quality game. Wherever we do, it will be very difficult to compete with us in terms of quality," PNC Menon said.

Nevertheless, Sobha Group has set a high growth target of sales bookings for India business in the coming years.

Bengaluru-based Sobha Ltd posted a 28 per cent growth in sales bookings during the last financial year to Rs 6,644.1 crore from Rs 5,197.8 crore in the preceding fiscal.

Asked about the near-term goals, PNC Menon said, "We are targeting at Rs 30,000 crore worth of annual sales bookings in the next 4-5 years".

Ravi said Mumbai would be a major contributor to this growth target.

"This year, for instance, we are planning to be launching about close to 8 million square feet. So we are increasing our presence in the Delhi-NCR region. NCR is going to become a larger contributor to the total pie," he added.

To achieve this growth, PNC Menon also highlighted that Sobha Ltd's equity base is being increased to Rs 4,500 crore from the current Rs 2,500 crore. It will soon launch a Rs 2,000 crore rights issue for existing shareholders.

Promoters have around 52 per cent stake in Sobha Ltd.

Talking about expanding operations in other international markets, the group founder said it is looking at the US market and is currently negotiating for 700-acre land in Texas. "There is a huge opportunity in the US market."

On philanthropy, PNC Menon, whose 50 per cent wealth goes to charity, said the group is building 1,000 homes in Kerala and 300 homes in Oman -- where he moved at the age of 26 -- for poor people.

It has also announced plans to develop a university for 5,000 girls in India's Delhi-NCR with a total cost of Rs 1,200 crore. The university will provide education as well as other services free of cost.