Undeterred by the body blow it received due to the slowdown, Unitech today announced plans to construct 20,000 affordable houses at a cost of Rs 1,700 crore to become India's numero-uno realty company within a year.
"We made a mistake of only focusing on top two three per cent of India's population. Now we want to reach the masses... enter into budget and affordable houses... We will be the biggest player in the housing segment," Unitech Managing Director Sanjay Chandra told PTI.
"We plan to construct 20,000 affordable housing units over the next two years... These will be low-cost homes with prices ranging between Rs 10-15 lakh," he said claiming that they would become the largest realty player within a year.
At present, Unitech has a land bank of about 8,000 acres covering 500 million sq. ft. Its rival DLF's land bank has come down to 425 million sq. ft. In the last quarter of 2008-09.
Both Unitech and DLF suffered the most due to the meltdown and had been forced to go for distress sale of the assets to keep their finances under check even though shares of the two plunged dramatically in the last six months.
DLF's share price had hit a 52-week low of Rs 124.15 in February 2009 from a high of Rs 614.90 in May 2008.
Unitech's share price also plunged to a low of Rs 21.8 from a high of Rs 267.5 in the past one year. "People do not look at land bank any more. What our aspiration is to be definitely the largest player in housing that we can do by doing volumes... By this year we should be the largest realty player in terms of volume," Chandra said.
He said the group's biggest strength was that it had paid for all the land it owned and hence could launch new projects with least costs.
Elaborating on the new strategy, Chandra said that "we have realised that we can't grow until we are able to cater to at least 50 per cent of urban populating in any city".
Therefore, the company is planning to construct such houses, whose average construction cost is estimated at about Rs 1,000 per sq ft, on a total area of 16-17 million sq ft, he added.
At this average cost, the total investment for such houses would work out to be about Rs 1,700 crore.
"We are actually now getting into a category, where we will be able to sell homes for Rs 10 lakh or below," he said, while admitting that it made a mistake by earlier focusing only on premium and luxury housing.
"We are concentrating on churning products like a factory," Chandra added.
The company would start the low-cost housing from Chennai and then later taking to all the markets, where it already operates like Kolkata, Lucknow, NCR and Hyderabad.
Unitech possesses the land to develop these projects and construction cost would be met largely through advances from customers, he said.
Besides low-cost housing, the company would also develop 1,500 dwelling units every year on mid-income category.
The company would launch over 40 projects this fiscal, predominantly affordable housing with apartment sizes ranging from 500-1100 sq ft, he said.
In order to reduce its debt, Unitech last month raised Rs 1,621 crore through Qualified Institutional Placements. It is also selling various assets like hotels, school plots and office complexes.
