Here's why Shriram Properties share price jumped 7% on October 30; details

Shriram Properties share price: Shares of Shriram Properties (SPL) rallied up to 6.85 per cent to hit an intraday high of Rs 111.40 per share on Wednesday, October 30, 2024.

 

The uptick in share price came after the company announced that it has signed a Joint Development Agreement (JDA) for a 6-acres prime land in the upcoming micro markets of Undri in Pune. 

 

This mixed-use development will feature over 650 residential apartments along with retail and commercial spaces, totaling more than 1 million square feet of saleable area, set to be developed over the next four years. 

 

Shriram Properties estimates the project could generate revenue of approximately Rs 700 to Rs 750 crore and plans to launch it in the second half of FY25.

 

The company aims to create a landmark residential community in this burgeoning Pune market, offering convenient access to IT/ITeS hubs, retail outlets, prestigious educational institutions, and key city areas. 

 

Additionally, there is an option to develop an extra 8 acres, primarily for retail and commercial use. Shriram Properties is nearing the completion of securing development rights for this additional land.

 

The decision to expand into Pune stems from its position as the second-largest residential market, which has experienced major growth in recent years, Shriram Properties said. The city’s mid-market focus and favourable customer demographics align well with SPL’s core markets of Bangalore and Chennai, supported by a vibrant economy and increasing infrastructure investments.

 

This project acquisition is a strategic move for SPL to accelerate growth while maintaining an asset-light approach over the coming years. 

 

Furthermore, it will enhance the company's already strong project pipeline, which includes 42 projects with a total of 42 million square feet of saleable area. 

 

Murali Malayappan, chairman and managing director, SPL said, “This investment is consistent with our asset light strategy for accelerated growth. Pune is a promising market, and we see significant potential for large, established brands like Shriram. Owing to its proximity to IT/ITeS, Undri emerges as a vital micro market witnessing significant demand in recent years. We are looking forward to the project launch during this quarter and remain committed to delivering top-notch quality swiftly and ensuring utmost satisfaction for our customers.”

 

As of June 30, 2024, 26 of these projects are ongoing, representing 24.3 million square feet of saleable area, with nearly 75 per cent already sold and no inventory remaining in completed projects.

 

At 11:15 AM, Shriram Properties shares were trading 3.69 per cent higher at Rs 108.10 per share. In comparison, BSE Sensex was trading 0.19 per cent lower at Rs 80,218.09 levels.