"With the real estate being what it is now, our first priority is selling high-cost land and filling our land bank with low-cost lands. We will also go for low-cost housing," Chairman and Managing Director of the Rs 4,200-crore company, E Sudhir Reddy said.
IVRCL currently has 120 acres in Noida, about 1,000 acres in Bangalore, 400 acres in Pune and 200 acres in Panvel (Navi Mumbai), besides large extent of land in Hyderabad, Nagpur and Visakhapatnam. The market value of these plots was estimated at over Rs 4,000 crore.
On a pre-qualification basis, IVRCL has been allotted 120 acres in Noida a year-and-a-half- ago. This includes 25 acres meant for setting up an IT SEZ. While the SEZ land was allotted at a rate of Rs 7.5 crore per acre, the remaining 95 acres were allotted at about Rs 12 crore per acre. As the rules do not allow sale of SEZ land, IVRCL proposes to raise unfinished structures and dispose off the property.
"The cost of the shell construction will be Rs 2,000 per sft. I will transfer this built-up area to the purchaser at the same cost. However, I will get a premium on the land cost," Reddy said adding that while the company purchased SEZ land for about Rs 17,000 per square metre, the minimum upset price fixed by the government for bidding in that area now stood at about Rs 25,000 per square metre.
Though the disposal of the SEZ property essentially means sale of constructed area, land cost will be added in the transaction. In view of the rising interest rates and increasing input costs, the company had also decided to go in for low-cost housing.
"We are currently building 9 million square feet of low-cost houses spread over 3,000 acres in different cities. The highest price we are charging is Rs 2,200 per sft," he said.
According to Reddy, IVRCL is also planning to rope in about 10 construction firms for setting up cement plants in different parts of the country for captive consumption. The idea is to put in about Rs 25 crore each to raise about Rs 250 crore capital and seek funding from banks and private equity (PE) firms for setting up six cement plants.
"I spoke to some PE firms who are willing to invest in the proposed project. Banks are also eager to finance the project as 75 per cent production is meant for captive consumption," Reddy said.
