Synergy Property Development Services, the global private equity giant Blackstone’s sole investment arm in the Indian construction sector, eyes a four-fold jump in its top line in the next four to five years, according to Chairman and Managing Director Sankey Prasad.
“We are looking at revenues of at least Rs 1,000 crore in the next four to five years. Besides property, we see huge opportunities in infrastructure, healthcare and education,” Prasad said.
Synergy, which does design, architecture and construction management for realty projects, has plans to take up project management in road, airport and power sectors, and increase its presence in international markets to achieve the target, according to him.
Synergy, set up by Prasad and his 40 colleagues from The Chatterjee Group (TCG) in 2003, expects a net profit of around Rs 50 crore on revenues of Rs 250 crore this year. The company is working on around 70 million sq ft of projects and has a headcount of 500.
Synergy has already tied up with Kuala Lumpur International Airport to jointly develop airports in India.
Depending on the credibility of infrastructure developers, risks attached and guarantees, the company was ready to pump in own funds as ‘bridge money’ for projects, he said. He does not rule out the possibility of tapping his investors for this.
In 2008, Blackstone Real Estate Partners, part of The Blackstone Group LP, picked up a 35 per cent stake in Synergy for around Rs 85 crore.
Blackstone’s peers in India see its investment in Synergy as a stepping stone for its future real estate play. “They want to understand how Indian real estate works through this company. I think once they understand it completely, you can expect a lot many things from them,”’ said a managing director of US-based PE fund.
Blackstone is close to buying around $2 billion worth of Asian real estate assets, including half-a-dozen in India, of Bank of America-Merrill Lynch.
Prasad said the Blackstone money was spent in creating promoter’s wealth and employee stock options (Esops). “We do technical evaluations of Blackstone’s potential investments, as we do for other companies. They also give us leads on various projects, as we do not have a dedicated marketing team,” he said.
“The role of Blackstone will start once international and domestic markets pick up,” he said. After establishing in India, the company plans to expand in international markets, where it sees about half of its revenues coming from in the coming years. Synergy is already present in West Asia, Malaysia and Eastern Europe.
Prasad said Sri Lanka was the next stop for Synergy, where he saw lots of opportunities.
Though he ruled out venturing into real estate development, Prasad said the company was mostly interested in project management in the extreme ends of housing market — premium housing on one end and low cost on the other. “We focus on the premium segment because that requires significant project management work and low cost because its volumes justify our work.”
