Due Diligence in Real Estate 1

8/8/2019 Due Diligence in Real Estate 1

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Presented By;

Agnes Joseph

Madhura Phatak

(105)

Sudhir Ghanekar (68

Sachin Gupta (55)

Due Diligence onHDIL

Sterling Institute Of Management



Due Diligence in Real Estate

TABLE OF CONTENTS

Sr.No.

Content PageNo.

1 INTRODUCTION 32 HISTORY OF HDIL 43 MANAGEMENT OF HDIL 6

4 BUILD THEN SELL CONCEPT 75 COMPETITORS 86 CAPITAL STRUCTURE 97 BUSINESS SEGMENTS OF HDIL 11

8 WAYS OF RAISING FINANCE 13

9 BLACK MONEY IN REAL ESTATE 1410 MARKETING AND SALES STRATEGY 17

11 MATERIAL CONTRACTS AND DOCUMENTSFOR INSPECTION 20

12 GOVERNMENT APPROVALS ANDLICENSING ARRANGEMENTS

20

13 LEGAL DUE DILIGENCE 2214 FSI – FLOOR SPACE INDEX 2615 FINANCIAL STATEMENTS AND ANALYSIS 2916 KEY RISKS 35

17 RBI’s INSTRUCTIONS TO BANKS 3718 FUTURE ASPECTS 44

Sterling Institute of Management Studies, Nerul




INTRODUCTION

Housing Development and Infrastructure Limited is a listed real estate

development company in India, with significant operations in the MumbaiMetropolitan Region. HDIL's business focuses on Real Estate Development,

including construction and development of residential projects and, more recently,

commercial and retail projects, Slum Rehabilitation and Development, including

clearing slum land and rehousing slum dwellers, and Land Development, including

development of infrastructure on land which the company then sells to other

property developers. HDIL has an integrated in-house development team which

covers all aspects of property development from project identification and inception

through construction to completion and sale.

Since incorporation in 1996, HDIL has developed 23 projects covering

approximately 19.29 million square feet of saleable area, including approximately

12,730,000 square feet (1,183,000 m2) of land sold to other builders after Land

Development, primarily in the Mumbai Metropolitan Region. HDIL also have

constructed an additional 1,900,000 square feet (177,000 m2) of rehabilitation

housing area under slum rehabilitation schemes. HDIL's residential projectsgenerally comprise groups of apartments, towers or larger multi-purpose

“township” projects in which individual housing units are sold to customers. The

commercial projects are a mix of office space and multiplex cinemas. The retail

projects focus on shopping malls. They usually follow a “build and sell” model for

the properties they develop. HDIL also undertakes slum rehabilitation projects

under a Government scheme administered by the Slum Rehabilitation Authority

(SRA), whereby developers are granted development rights in exchange for clearing

and redeveloping slum lands, including providing replacement housing for the

dislocated slum dwellers. The company has also bagged the prestigious Mumbai

Airport Slum Rehabilitation Project to rehabilitate the slum dwellers located on 276

acres (1.12 km2) of Mumbai Airport land. Although historically HDIL has focused on

real estate development in the Mumbai Metropolitan Region, as part of their growth





strategy they are considering projects in other locations, including Kochi and

Hyderabad. They also are considering expanding into hotel projects, special

economic zone(SEZ) developments and “mega-structure” complexes, which are

large-scale mixed-use retail, commercial and residential developments. HDIL

launched an IPO in July 2007 and is currently listed on the Bombay Stock Exchange

(BSE) and the National Stock Exchange (NSE).

HISTORY

HDIL, part of the Wadhawan Group, was founded by the late Mr. Dewan Kuldip

Singh Wadhawan in 1973. The Wadhawan Group was founded for the purpose of

land aggregation, land management, land development and construction of

residential, commercial and retail units, townships and infrastructure. Initially, the

Wadhawan Group was also involved in the marketing of residential, commercial and

industrial plots. In 1973 the first residential building named Kapil Kunj at Vasai was

completed by the Wadhawan Group. In 1978, all the projects of the Wadhawan

Group came under the brand name of Dheeraj. As of December 31, 2006, the

Wadhawan Group has developed (including our developments) approximately 72.8

million square feet of saleable area and, additionally, has constructed

approximately 5.5 million square feet of rehabilitation area under slum

rehabilitation schemes. Our Company was incorporated on July 25, 1996 as Housing

Development and Improvement India Private Limited, with the objective of

developing large-scale real estate projects including residential, commercial and

retail projects such as shopping malls, multiplexes and integrated townships and

partnering in development of public infrastructure.

Since our incorporation in 1996, we have developed and constructed 2

projects covering approximately 11.0 million square feet of saleable area, including

approximately 5.7 million square feet of land sold to other builders after Land

Development, all in the Mumbai Metropolitan Region. We also have constructed an

additional 2.0 million square feet of rehabilitation area under slum rehabilitation

schemes.





Vision:

Since its inception in 1996 HDIL has completed 24 projects covering 11.3mn

sq ft of saleable area. The company’s projects have an enhanced buyer perception,

especially since it is a part of the Wadhawan group which has developed a strongreputation for quality construction in the MMR over three decades. The company

has created strong brand equity among the middle to higher middle class group in

the residential segment, while establishing a firm foothold in commercial and retail

segments as well. HDIL‟s expertise includes strong relationships with suppliers from

whom it sources material and with contractors that it engages for carrying out

construction services. This enables it to keep a firm check on quality and cost. HDIL

can leverage the experienced gained from the projects implemented in other parts

of the country and for other types of projects.

HDIL has a novel business model wherein it balances its short-term as well as

long-term project initiatives. HDIL is a leader in the SRS segment. Executing SRS

projects allows HDIL to generate higher returns on its projects, as the cost of land is

the cost of construction. HDIL‟s SRS projects are characterized by a lower asset

cycle risk as against its non-SRS projects, which involve a one-time upfront payment

for the land parcel. HDIL‟s future initiatives involve a venture into the hospitality

sector, development of a SEZ and bidding for Airport modernization. HDIL has so far

followed the build-and-sell model even for its commercial and retail properties.

While this may not be in line with international practices, for companies such as

HDIL, which also lock their working capital in developing SRS in Mumbai, there may

be higher requirement of capital, and this is better met by building and selling,

rather than leasing property.





MANAGEMENT OF HDIL:





HDIL’s BUILD – THEN SELL CONCEPT

THE Build Then Sell (BTS) concept is where housing developers have to complete a

housing project before selling houses to buyers.

However, the greatest obstacle facing developers in such a concept is finance.

Banks normally only agree to provide financial backing once a sizeable number of

the houses have been taken up.

Under the BTS approach, the developer does not receive progressive payment from

end-financiers as mentioned above and therefore requires higher financing from the

bridge-financier in order to finance the project.

As mentioned above, the BTS approach does shield house-buyers against the risk of

the project not being completed. However, from the bridge-financier’s point of view,

the completion risk remains relatively unchanged vis-à-vis the SAB approach. In

addition, the absence of progressive payments from end-financiers means that the

developer would most likely require higher bridge-financing to complete the project.

This also means higher risk to the bridge-financier. Hence, to minimize the

likelihood of abandonment of the project, the bridge-financier of a BTS project

would most likely fund only experienced developers who have the required track

record and adequate financial strength.

HDIL has so far followed the build-and-sell model even for its commercial and retail

properties. While this may not be in line with international practices, for companies

such as HDIL, which also lock their working capital in developing SRS in Mumbai,

there may be higher requirement of capital, and this is better met by building and

selling, rather than leasing property. However this model has its disadvantages, asit would lead to bunching of revenues in some years. . This would also result in

fluctuating operating costs and negative cash flows. HDIL has, however, offset this

to some extent by regular sale of transferable development rights that it earns

thorough the slum rehab projects.





COMPETITOR:





CAPITAL STRUCTURE

The of Details of Share Capital structure of HDIL are as follow:

a) Capital structure of the Company as on 30th September 2009

b) Since the present issue is of debt on a private placement basis, which is not

convertible into equity, there is no requirement for promoter’s contribution. There is

no promoters’ contribution to this Issue, nor is there any reservation for any group

company or any other class of persons.

c) The post-issue paid-up share capital shall be the same as pre-issue paid-up share

capital. The Debentures being issued under this Issue are not convertible.

d) The company has made a preferential allotment of 2,60,00,000 convertible

warrants of Rs. 10 each to Shree Rakesh Kumar Wadhawan, promoter & Executive

Chairman of the company at a price of Rs. 240 per warrant. This convertible warrant

will be converted into equity share upon receipt of full subscription





BUSINESS SEGMENTS OF HDIL:





Residential business:

HDIL’s residential projects consist of apartment complexes with multiple story

Most residential units are pre-apartment towers as well as self-contained planned

communities (townships) with sold due to their prime locations mixed-use

residential and commercial Financials space. Prime locations, good quality and

strong brand recall construction and a reputed brand name allow the company to

pre- sell a significant portion of its residential units prior to completion of a project.

HDIL currently has 16 residential projects (ongoing plus planned), aggregating

86.5mn sq ft, to be developed over the next 5-6 years in Mumbai, Kochi and

Hyderabad. The company also intends to develop ~2.2mn sq ft of residential space

as part of its SRS projects.

Commercial business:

HDIL has developed several commercial and office projects across various

locations within the MMR, which are largely targeted at established financial and

service sector companies. The company has also undertaken the development of

several multiplexes, either as standalone structures or within upcoming malls. HDIL

follows the build and sell model of development and does not retain ownership or

management responsibilities in any of its projects. It currently has two projects

under development across the commercial space totaling 0.1mn sq ft, with a further

3.4mn sq ft of commercial space planned as part of its SRS initiative.

Retail business:

HDIL sells retail space directly to store operators, rather than retaining

ownership and leasing the space. Many of its retail projects are located in areas

where the company is also undertaking various residential and commercial projects.





HDIL‟s retail development pipeline till 2012 comprises 18 projects covering 19mn

sq ft.

Slum rehabilitation and development:

HDIL is engaged in slum rehabilitation projects on both government and

private land. This involves new housing for slum dwellers under a government plan

administered by the Slum Rehabilitation Authority (SRA). It also builds new housing

of developable land for slum dwellers displaced by government infrastructure

projects such as roadway expansion. Land occupied by slum dwellers constitutes a

significant portion of developable land in the MMR and rehabilitation projects

therefore provide significant opportunities for real estate development. The

company has 13 ongoing rehabilitation programs in the MMR.

WAYS OF RAISING FINANCE

1. Angel investors - These are investors who provide money to start up new

project. They take a greater risk than a bank and will want to make more

money because of that.

2. Venture Capitalist - These are groups that have funds available who are

willing to take a big risk (often on new technology) and expect a high return.

This is usually a source for an existing business rather than a new one. VCs

invest large amounts of money in the business and therefore own a large part

of the business. Their goal is to sell the business in a relatively short time.

One way they sell the business is by taking the company public through an

IPO (Initial Public Offering).

3. They can ask big investors to invest in infrastructure projects

4. They can go for Issue of fixed deposit receipts





5. They get maintenance charges from new buildings.

Black Money

Suppose a company which is for the first time entering the market and plans to build up to

6th

floors. This entire project will be costing Rs. 10 crore in a period four years. Thecompany decided to borrow money from bank @15% p.a. In this project the total flats

would be 24 of same area.

The builder has decided to take only 60 per cent of the total consideration

as white amount.


Total project cost Rs. 10 crore24 Flats

1

st

year - 4 Flats are sold costing Rs 70 lacs per flat. This means revenueof Rs. 2.8 crore will be received in four installment per year.

Total amount received in 1st year as a installment is Rs. 70 lacs. This will

be used for 1st year repayment of bank loan interest of Rs. 70 lacs and

remaining amount will be carry forward for the next year.

Here builder signed an agreement for Rs. 50 lacs per Flat for this

year with the buyer to avoid the payment of capital gain tax and normal

tax.

Here in 1st year total sales: white Money Rs 50 lacs per flat

Black money Rs. 20 lacs per flat2nd year- 3 Flats are sold costing Rs 80 lacs per flat. This is Rs.2.4 crorewill be received in three installments per year.

Total amount received in 2nd year as an installment is Rs. 1.5 core. This

will be used for 2nd year repayment of bank loan interest Rs. 70 lacs and

remaining amount will be carry forward for the next year.

Here builder signed an agreement for Rs. 50 lacs per Flat for this year

with the buyer to avoid the payment of capital gain tax and normal tax.

Here in 2ed year total sales: white Money Rs 60 lacs per flat

Black money Rs. 20 lacs per flat

1st year:

Company

borrowed Rs.3

crore.

Interest Rs. 45

lacs

2ed Year:

Company

borrowed Rs.2

crore.

Interest Rs. 70

lacs





3rd year --5 Flats are sold costing Rs 85 lacs per flat. This is Rs. 4.25 cror

will be received in two installments per year.

Total amount received in 3rd year as an installment is Rs. 3.62 core. This

will be used for 1st, 2nd & 3rd year repayment of bank loan interest Rs.

1.2 lacs and remaining will be carry forward for the next year.





3rd Year:

Company

borrowed Rs.3crore.

Interest Rs. 1.2

crore

4th Year:

Company

borrowed Rs.2

crore.

Interest Rs. 1.5

crore

Plus 10 crore

4th year --6 Flats are sold costing Rs. 90 lacs per flats. This is Rs 5.4 crore

will be received within one year.

Total amount received in 4th year as a installment is Rs. 9.03 core. This

will be use for 1st repayment of bank loan interest Rs. 1.5 crore and

principle amount Rs. 10.

Here builder signed an agreement for Rs. 65 lacs per flat for this year




5th year:

5th year 6 Flats are sold. This is costing Rs. 1 core per flats. This Rs 6crore will be received within one year.

Total amount received in 5th year is Rs. 6 core.








Total Sales in four years :

4 *7000000 = 28000000

3*8000000= 24000000

5*8500000= 42500000

6*9000000= 54000000

6*10000000= 60000000

Total sales = 209500000

Cost =(101500000)

Profit= 108000000

Black Money

2000000*4= 8000000

2000000*3= 6000000

2000000*5= 10000000

25000000*6= 15000000

25000000*6= 150000000





Total = 540000000

Company will pay tax only on 540000000

REAL ESTATE MARKETING STRATEGIES

As an estate agent, it is likely that you are also required to be a marketing

professional, capable of devising persuasive marketing strategies to encourage

potential buyers and sellers to contact you.

The following are the most common off-line marketing strategies that you can

employ to attract business:

• Mini billboards

• Radio & television ads

• Brochures, flyers, and billboard signs

Reputation is everything. To build yours you can make use of the following

strategies:

• Local media interviews – The best way of letting people know about you is

to make media appearances. Well written and pertinent press releases have a

double effect of informing the public about real estate trends, and reinforcing your

image. The more familiar you are to the local community, the more people will be

willing to trust you and your expertise in buying and selling properties.

• Seminars – An easy method to increase the number of customers who come

to you is by giving free seminars related to real estate topics. Public speaking as a


http://www.estate-agents-uk.net/real-estate-marketing-strategies/real-estate-all

http://www.estate-agents-uk.net/real-estate-marketing-strategies/real-estate-all




marketing strategy can be quiet effective in exposing your agency to potential

investors and residential customers. At the same time, you are reminding people of

your experience and expertise and how you can help them.

On-line marketing strategies can often be easier, cheaper and more convenient

ways to find new customers. To reach potential customers, you need to have a

website of your own that both presents information about you and also collects

information from customers as they visit - feedback (even negative such) is

essential to understanding how best to reach your target audience. There are many

strategies involved in on-line marketing, here are two of the more common:

A combination of off-line and on-line marketing will often be the most effective way

to reach the maximum amount of potential customers, and generate the most

business.

As a real estate agent, you may experience common challenges such as stiff

competition and a declining market. One way to help you increase business and

stand out from the crowd is to make use of a variety of marketing strategies. If

marketing dollars are scarce, some strategies can be implemented at little or no

cost.

Form Alliances

Form alliances with other real estate professionals in your area such as mortgage

originators, appraisers and title companies. By referring clients to others, they, in

turn, will send business your way. This form of free marketing can help reduce your

overall marketing costs as well as save you the amount of time you need to spend

on prospecting.

Stay In Touch

Stay in touch with your clients even after they have bought or sold a home. An

easy, no-cost method of communication is to send a regular email newsletter filled





with home care tips and information about changes in the real estate market. This

will keep you in their minds for the next time they are in the real estate market. It

can also lead to referral business.

Use the Internet

Use the Internet to enhance your marketing efforts. For a fee, websites such as

Obeo.com allow you to use virtual tours to provide an additional way for potential

clients to view homes for sale. This can be more effective than posting photos, as it

offers buyers features such as being able to see what the home would look like if it

were painted a different color.

Avoid Cold Calls

Making cold calls by phone is much more difficult in the age of the National Do Not

Call Registry, and you may end up annoying potential clients. Instead, attempt to

meet people in person by attending public events like street fairs and local sporting

events, and join community organizations like the chamber of commerce or PTA.

You'll get to meet people in a more relaxed setting, and your business card can be

used as a type of in-person cold call.

Use Social Media

Use social media websites such as Twitter as a free marketing tool. Social media

allows you to post your views and information about real estate, and network with

other real estate professionals as well as those who may be in the market to buy or

sell a home. It can also help you reach people from a different area who may be

considering moving to your town.

ROBUST PROJECT PIPELINE





HDIL has a robust project pipeline. It plans to develop 115 million sq ft of

saleable area over the next 7-8 years. It is currently executing 21 projects and 11

more are lined up.





MATERIAL CONTRACTS AND DOCUMENTS FOR

INSPECTION :

Copies of the contracts and documents referred to below, all of which have

been attached to a copy of this Information Memorandum, which has been delivered

to BSE may be inspected at the Registered office of the Company between 10.00

a.m. To 5.00 p.m., on any working day between the date of this Information

Memorandum and the date of closing of this issue.

1) Certified true copy of the Memorandum and Articles of Association of the

Company, as amended.

2) Copy of the resolution of the Board of Directors passed at the meeting held on

29th October 2009 approving the issuance of Secured Non-Convertible Debentures

on a private placement basis.

3) Copies of the Balance Sheet, Profit and Loss Account for the Three years ended

31PstP March, 2009 and the report of the Auditors thereon of the Company.

4) Rating letter of CARE assigning credit rating for this Issue.

5) Copy of the in-principle approval granted by the Bombay Stock Exchange

Limited, Mumbai (BSE) for listing of the Debentures to be issued in terms of this

Information Memorandum.

6) Copies of the agreement between the Company and National Securities

Depository Limited (NSDL).

GOVERNMENT APPROVALS AND LICENSING ARRANGEMENTS:

The Company has obtained Government and other applicable approvals for

carrying on its business, and all such approvals are currently valid and in force. The





Company will apply for, and will continue to apply for, relevant renewals,

modifications and new licenses, as may be necessary or become required for the

purposes of its business or operations.

Except as stated below, we have received the necessary approvals from the

Government of Maharashtra and various governmental and regulatory authorities in

relation to our projects under development and planned projects. No further

approvals are required for conducting our present business other than as described

below.

a) APPROVALS FOR THE ISSUE

The DIPP has by its letter no. 5(6)2000-FC (Pt.File) dated January 22, 2007

clarified to us that ‘guidelines notified vide Press Note 2 (2005 Series) are

applicable to investment made only under the FDI route and not applicable to

investment by FIIs under the Portfolio Investment Scheme under the FEMA

Regulations.’

We have sought a confirmation from the RBI by a letter dated January 23, 2007 that

FIIs are permitted to subscribe to Equity Shares in the Issue under the portfolio

investment scheme and that Press Note 2 (2005Series) is not applicable to

investments by FIIs in initial public offerings.

b) PROJECT-SPECIFIC APPROVALS

Described below are the approvals obtained and applied for in respect of our

ongoing projects.

1. Grande

Letter of Intent No. SRA/ENG/792/HW/Pl/LOI dated October 17, 2003 issued by the

SRA.





• Intimation of Approval No. SRA/Ch.E/NG/1052/HW/PL/AP dated March 5, 2004

for Sale Building No. 1 issued by the SRA valid upto June 4, 2004

• Commencement Certificate No. SRA/ENG/1052/HW/PL/AP dated July 2, 2004

for work up to plinth level for Sale Building No. 1 and re-endorsed up to plinth

level as per amended plans dated August 5, 2004 issued by the SRA.

• In relation to the 2 rehabilitation buildings constructed for the rehabilitation of

slum dwellers, we have obtained Intimation of Approval and Commencement

Certificate for Building No. 1.

2. Bandra (W) SRS Scheme

Letter of Intent No. SRA/Eng/466/HW/MHL/LOI dated May 17, 2000 issued by the

SRA.

Intimation of Approval No. SRA/ENG/1403/HW/MHI/AP dated February 7, 2005

issued by the Slum Rehabilitation Authority valid up to May 6, 2005.

In relation to the rehabilitation building constructed for the rehabilitation of

slum dwellers, we have obtained Intimation of Approval, Commencement

Certificate and part Occupation Certificate. Construction of the building is

complete.

LEGAL DUE DILIGENCE

Legal Proceedings





Filing Of the Information Memorandum

This Information Memorandum has been filed with BSE in terms of Clause 4.2(b) of

the SEBI circular no. SEBI/MRD/SE/AT/46/2003 dated December 22, 2003 as the

Debentures are being privately placed and issued in the denomination of Rs.

1,000,000.00/-(Rupees One Million Only) each. This Information Memorandum is not

required to be filed with any other regulatory authority, as per the provisions of the

SEBI Private Placement Circulars.

Sez Approvals

In principle approval No. F.2/481/2006-SEZ dated November 14, 2006 issued by the

Ministry of Commerce of Industry, Department of Commerce (SEZ Section),

Government of India to the Company for the development, operation and

maintenance of a sector-specific Special Economic Zone for multi-service sector at

Thane, Maharashtra, valid for a period of one year subject to conditions stated

therein.

Premises- Specific Approvals

Mumbai Office:

Certificate of registration dated December 1, 2006 under the Bombay Shops and

Commercial Establishments Act, 1948 for the premises located at Dheeraj Arma, 9th

Floor, Anant Kanekar Marg, Bandra (E).

Employee-Related Approvals

1. Letter No.B/Cov./RL-4718/31-48694-101 dated November 29, 2006 from the

Employees State Insurance Corporation Office of the Regional Director,

Maharashtra allotting Code No. 31-48694-101 requiring the Company to take





steps for registration of its employees under the Employees State Insurance

Act, 1948.

2. Letter No.MH/PF/APP/93979/Enf VIII/SAO-KNO/10981 dated December 16,

2005 from the Office of the Regional Provident Fund Commissioner,

Maharashtra allotting Code No. MH/93979 requiring the Company to

implement the provisions of the EPF Scheme, Family Pension Scheme and

Deposit Linked Insurance Scheme.

Intellectual Property Approvals

Company has applied for the registration of the HDIL logo as a trademark in

Class 37 in respect of Construction of Residential and Commercial Projects. The

application dated May 30, 2006 has been accorded Application No. 1455014 by the

Trademarks Registry, Mumbai.

I. Public Or Rights Issues In The Last Five Years

• The company has come out with allotment to promoters, the promoters group

and others (10 allottees) of 8,000,000 equity share of Rs.10/- each for cash at

a price of Rs. 72.50 per equity share (including share premium of Rs.62.50 per

equity share) aggregating to Rs. 580.00 million.

• The company has come out with Bonus issue in the ratio of 4:1 of 40,000,000

equity share of Rs.10/- each for Capitalization of reserve.

• The company has come out with Bonus issue in the ratio of 13:5 of

130,000,000 equity share of Rs.10/- each for Capitalization of reserve.

• The Company has come out with maiden issue of 300,000 equity share of

Rs.10/- each for Pre-IPO Placement to BCCL at a price of Rs.500.00 per equity

share (including share premium of Rs. 490.00 per equity share) aggregating





to Rs. 150.00 million. The Equity share has been offered in a 100% book-

building process.

• The Company has come out with maiden issue of 29,700,000 equity share of

Rs.10/- each for cash at a price of Rs.500.00 per equity share ( including share

premium of Rs. 490.00 per equity share) aggregating to Rs.14,850 million.

The Equity share has been offered in a 100% book-building process.

• The company has come out with GSO allotment of 4,272,081 equity share of

Rs.10/- each for cash at a price of Rs. 500.00 per equity share (including share

premium of Rs.490.00 per equity share) aggregating to Rs. 2,136.04 million.

• The company has come out with Bonus issue in the ratio of 2:7 of 6,12,20,595

equity share of Rs.10/- each for Capitalization of reserve

• The company had come out with QIP issue of 70,350,000 equity shares of

Rs.10 at the price of Rs. 240 per share including a premium of Rs.230 per

share, aggregating Rs. 16,884 million.

• The company has made a preferential allotment of 2,60,00,000 convertible

warrants of Rs. 10 each to Shree Rakesh Kumar Wadhawan, promoter &

Executive Chairman of the company at a price of Rs. 240 per warrant. This

convertible warrant will be converted into equity share upon receipt of full

subscription.

CASES

1. Cases where the Company is a party





Messer Holding Limited has initiated proceedings against Shyam M. Ruia and

others, in the High Court, Bombay in relation to the property bearing CTS No.

551/27, 552, 552/1, 551/5 to 552/12.

Prakash Gunaji Shinde (Plaintiff) has filed a suit in the City Civil Court, Bombay

against M/s. R.T. Constructions and the Company (the Defendants).

M/s. Lok Holdings & Constructions Limited (Plaintiff) had filed an arbitration

petition against the Company in the High Court, Bombay.

2.Cases in relation to projects of the Company where the

Company is not a party:

Nowrsji J. Gamadia represented by his legal heir, Behram N. Gamadia(Plaintiff) has filed a suit in the High Court, Mumbai against Samarthmal P.

Seth (Defendant) with respect to property at C.S. No. 18/738, Carmichael

Road, Mumbai (Suit Property).

3. Other Proceedings

Cases where the Company is a party

The Company has approximately 48 property related proceedings initiated

against it and it has initiated two property related proceedings against various

parties. These proceedings are pending adjudication. These proceedings

primarily relate to property related disputes which include disputes in relation

to ownership of properties, evacuation of slum dwellers, acquisition of TDRs

and slum rehabilitation projects.

Cases in relation to projects of the Company where the

Company is not a party





Two proceedings are pending in relation to our projects, in which the

Company is not a party, at various stages of adjudication. These proceedings

primarily relate to creation of interests and right to possession.

4. Criminal Cases

One Mr. Nilesh Patil has filed complaint in the Ld. Metropolitan Magistrate’s

Court at Mulund against the Hon’ble Chairman of HDIL.

One Mr. Praful Dave has filed the above case against Angel Developers in the

Metropolitan Magistrate Court, Vikhroli, Mumbai and the same is pending for

final hearing.

Ashna Co-op. HSG Ltd. has filed the above case against one Karm Trading and

Investment Pvt. Ltd. and Sapphire Land Development Pvt. Ltd., in the Ld.

Metropolitan Magistrate’s Court at Bandra, Mumbai under the provisions of

MOFA Act and the same is pending for appearances.

WHAT IS FSI

FSI is Floor Space Index. FSI means Floor Space Index, which is the ratio between

the built up area allowed and plot area available. It is not calculated but granted by

the authorities.

Example: FSI - 2, means plot area 5000 sq ft. The construction can have a floor

space of 10,000 sq ft. i.e if you build 10 flats then each must have a area of 1000 sq

ft.

Simply it means that higher the FSI, higher built up area is possible.

Benefit of FSI to HDIL

In a move significant move in the real estate industry, HDIL, a part of the

Wadhawan Group, has sold development rights of its commercial property 4.5 lakh





sq ft for Rs 900 crore. The significance to the deal is attached to the per square feet

rate of Rs 20,000 charged the six storey commercial property Kaledonia at Andheri

a north western suburb of Mumbai. This comes on the back of the Unitech deal of 8

million sq ft of property,which was sold for Rs 25,000 per sq ft, and at a time when

real estate prices were expected to correct.

Niranjan Hiranandani, managing director of Hiranandani Group said "This only

indicates that the prices are not falling in Mumbai and suburbs. We have to increase

floor space index (FSI) and improve processes for development of townships to

bring about affordable housing."

Hariprakash Pandey, HDIL's assistant general manager (finance) told FE, "Andheri,

which enjoys a locational advantage, attracts per sq ft rate of Rs 20,000 to Rs

23,000. HDIL has entered into the sale of development rights agreement with Mack

Star Marketing Pvt Ltd. The company has already undertaken 23 commercial,

residential and retail projects with the deliverable areas of 50 million sq ft in

Mumbai, Hyderabad and Cochin. These projects are expected to be complete in

next three to five years."

The company has recently bagged the much debated slum rehabilitation project of Mumbai International Airport Ltd (MIAL) on or around Mumbai airport, spread over

276 acres. The company has also been short-listed by the state government for

bidding for the Dharavi slum rehabilitation project.

Hike in FSI seems priced in

The Maharashtra state government is likely to hike FSI from 1 to 1.33 in suburbs,

which will affect TDR prices. We have already factored stable TDR prices of

Rs2400/sq. ft. (i.e., 25% discount from the current level of Rs3,200/sq. ft.) and do

not expect a major negative impact incrementally. Further, we have assumed

4.5mn sq. ft. of TDR sale (i.e., 30% drop in TDR sales from FY2010) in FY2011 to





factor in the hike in FSI. A 10% decline in TDR price adversely impacts our NAV by

mere 3%.

Even as HDIL has been improving its revenues the company is yet to climb back to

its sales and profit levels of FY-09. For FY-10, sales at Rs 1,500 crore was 13 per

cent lower than the previous year, while profits declined by 27 per cent to Rs 567

crore. Evidently the ascend has been slow and tedious. Operating profit margins

have already climbed back to the pre-slowdown levels of over 50 per cent, thanks to

TDR sales.

However, company expect non-TDR sales, which are likely to bunch-up over the

next couple of years (revenue booked only on project completion), to significantly

ramp up revenues.





FINANCIAL STATEMENT ANALYSIS:





FINANCIAL STATEMENT ANALYSIS

Current Ratio:

• Very high current ratio

• Company has liquidity to meet its operational needs.

• Company is under trading

• Company is Over capitalization

Debt – Equity Ratio:

• Very Low Debt Equity ratio

• Company has sufficient stake of owners

• Greater safety of margin creditors

• Servicing of debt is easy

• More operational flexibility to management

• High credit standing in market

• Company can easily raise additional funds from market

Interest coverage ratio: Very high interest coverage ratio Shows Company is

not used debt capacity.

Company has continued and taken new projects that are why there is

increase in WIP.

TRANSFER TO RESERVES: Companies Directors have proposed to transfer Rs.

619.16 crores to Debenture Redemption Reserve, the balance of Profit and

Loss Account on Standalone basis would stand at Rs. 582.92 crores at the end





of financial year, and the total reserves of the Company stood at Rs. 6,680.90

Crores.

Due to increase in Reserves and surplus there is less return on net worth.

The Return On Capital Employed is shows decreasing trends, which means thedeterioration in earning capacity and efficiency of the company. In

construction sector there are sudden increase and decrease of ROCE

depending upon the completion stage of the Project.

EPS: Though there is decline in the sales of the company but earning per

share is not decline and which shows good returns to its shareholders as

compare to other companies of same sector.

Book Value of Share is raising continuously though decline in the sale.

DIVIDEND: The strength of your Company lies in identification, execution and

successful implementation of the projects in the infrastructure space To

strengthen the long-term prospects and ensuring sustainable growth in assets

and revenue, it is important for the Company to evaluate various

opportunities in the different business verticals in which your Company

operates. The Company currently has several projects under implementation

and continues to explore newer opportunities. Considering this be in the

strategic interest of the Company and believe that this will greatly enhance

the long-term shareholders value. In order to fund these projects in its

development, expansion and implementation stages, conservation of funds is

of vital importance. Directors have not recommended any dividend for the

financial year 2009 10.

Income statement analysis:





Sales of the HDIL ltd show the positive growth from 2007 to 2008 but after 2009 it

shows the declining trend because of the recession in that period. There is no any

other operating source of income.

Total cost of construction increase from 2007 to 2008 but again it goes down in

2009 to 2010. If we compared the construction expenses with other operating

expenses in 2007 to 2008 it indicates that other operating expenses is more than

the construction expenses because there may be greater chance of completion of

project and company made expenses on advertising of their projects. Company paid

interest and other expenses as their sale increases in previous years. Profit after tax

decrease in the year 2007- to 2009 due to the recession and fall in real estate

market. Profit in 2010 is 16.3% as compared to previous year.

Important ratios:

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

FY 2012

Valuation ration:





Company realised its debts within the 2 month. It knowing the speed at which

debts is collected by the company.

Company paid its creditors after 180 days means twice in a year.

Here company receiving payment within 2 month from debtors and making

payment to tit’s creditors after 3 months.

KEY RISKS

The real estate industry is undergoing a significant downturn which has, and could

continue to, adversely affect our business, liquidity and results of operations.

Further leveraging to fund continued land acquisition may strain balance

sheet:





HDIL to continue acquiring distressed assets by raising further debt @ interest

rates of up to 14%. While this may be accretive to its land bank value, the increased

debt levels remain a cause of concern given the current liquidity crunch being faced

by the sector.

Long gestation period of SRS:

Building consensus among slum dwellers, getting govt. approvals, clearance

of encroachments and rehabilitation, require significant time. Any delay or stalling

of a project can lock working capital / create a cash crunch; affecting the company’s

ability to complete existing projects or start new projects.

SRA rules and regulations:

Any change in critical regulations regarding SRS will directly affect HDIL’s

profitability. Also, a change in regulations affecting the sale of TDRs received from

projects under SRS will have a significant impact.

Execution risk

Airport project – Large no. of stakeholders (80,000 slum dwellers) high

probability of delays. Multifold jump in planned projects implies huge execution risk

.

Geographical concentration





A regional slowdown in construction/ infrastructure industry in Mumbai and

the surrounding area, or external developments which make projects in the Mumbai

area less economically beneficial will have an adverse affect.

Asset cycle risk

Prevalent high prices expose HDIL to an asset cycle risk. Also a wait-and-

watch approach by customers before booking new properties can impact cash flows

and the completion of existing/ new projects.

FINANCIALS

• Robust sales growth

HDIL expects to develop 115 million sq ft of residential and commercial space

by FY14-15. Revenues are witness a 56% CAGR over FY06-10E to Rs 4,632 crore

from Rs 1,204 crore. Net profit is expected to increase at a CAGR of 56% to Rs

2,087 crore from Rs 543 crore over the same period. While we believe the company

will progressively scale up its execution capabilities, we have assumed flat sales

realizations and a 4% increase in construction costs to be on conservative side.

• Higher margins to propel profitability further

The company is expected to perform well on the net margin front and its

return on net worth (RoNW) will be around 46-47% by FY09. The higher net profit

margins are due to higher profit contribution from slum rehabilitation business.

HDIL’s net profit margins are highest in the industry which clearly depicts the

management ability and robust business model. Going forward, we believe the

company would maintain these margins, with the lucrative slum rehabilitation

contributing more to the total business. SRS projects usually have margins of 72-

75% and normal residential projects have margins of 40-42%.





Increasing cost of resources

Increasing cost of raw materials such as steel, cement and labor can impactthe cost of construction and adversely impact margins. The ability to identify and

source land parcels at reasonable prices is also an area of concern, as it would

directly impact HDIL’s future growth prospects.

MASTER CIRCULAR ON HOUSING FINANCE SENDS BY RBI

TO BANKS:

1) DIRECT HOUSING FINANCE

Direct Housing Finance refers to the finance provided to individuals or groups

of individuals including co-operative societies.

Banks are free to evolve their own guidelines with the approval of their

Boards on aspects such as security, margin, age of dwelling units, repaymentschedule, etc.

Other Guidelines:

The following types of bank finance may be included under Direct Housing Finance:

(i) Bank finance extended to a person who is already owning a house in town/village

where he resides, for buying/ constructing a second house in the same or other

town/ village for the purpose of self occupation.

(ii) Bank finance extended for purchase of a house by a borrower who proposes to

let it out on rental basis on account of his posting outside the headquarters or

because he has been provided accommodation by his employer.





(iii) Bank finance extended to a person who proposes to buy an old house where he

is presently residing as a tenant.

(iv) Bank finance granted only for purchase of a plot, provided a declaration is

obtained from the borrower that he intends to construct a house on the said plot,

with the help of bank finance or otherwise, within such period as may be laid down

by the banks themselves

(v) Supplementary finance:

(a) Banks may consider requests for additional finance within the overall ceiling for

carrying out alterations/ additions/repairs to the house/flat already financed by

them.

(b) In the case of individuals who might have raised funds for construction/

acquisition of accommodation from other sources and need supplementary finance,

banks may extend such finance after obtaining pari passu or second mortgage

charge over the property mortgaged in favour of other lenders and/or against such

other security, as they may deem appropriate.

2) INDIRECT HOUSING FINANCE

2.1 General

Banks should ensure that their indirect housing finance is channeled by way of term

loans to housing finance institutions, housing boards, other public housing agencies,

etc., primarily for augmenting the supply of serviced land and constructed units. It

should also be ensured that the supply of plots/houses is time bound and public

agencies do not utilise the bank loans merely for acquisition of land. Similarly,

serviced plots should be sold by these agencies to co-operative societies,

professional developers and individuals with a stipulation that the houses should be

constructed thereon within a reasonable time, not exceeding three years. For this





purpose, the banks may take advantage of various guidelines issued by NHB for

augmenting the supply of serviced land and constructed units.

2.2 Lending to Housing Intermediary Agencies

2.2.1 Lending to Housing Finance Institutions

(i) Banks may grant term loans to housing finance institutions taking in to account(long-term) debt-equity ratio, track record, recovery performance and other

relevant factors.

(ii) In terms of NHB guidelines, housing finance companies’ total borrowings,

whether by way of deposits, issue of debentures/ bonds, loans and advances from

banks or from financial institutions including any loans obtained from NHB, should

not exceed 16 times of their net owned funds (i.e. paid-up capital and free reserves

less accumulated balance of loss, deferred revenue expenditure and intangible

assets).

(iii) All housing finance companies registered with NHB are eligible to apply for

refinance from NHB and will be eligible subject to the refinance policy. The quantum

of term loan to be sanctioned to them will not be linked to net owned fund as NHB

has already prescribed the above referred ceiling on total borrowing of housing

finance companies. A list of housing finance companies registered with NHB may be

obtained by the banks directly from NHB or download from www.nhb.org.in.

2.2.2 Lending to Housing Boards and Other Agencies





Banks may extend term loans to state level housing boards and other public

agencies. However, in order to develop a healthy housing finance system, while

doing so, the banks must not only keep in view the past performance of these

agencies in the matter of recovery from the beneficiaries but they should also

stipulate that the Boards will ensure prompt and regular recovery of loan

installments from the beneficiaries.

2.2.3 Financing of Land Acquisition

In view of the need to increase the availability of land and house sites for increasing

the housing stock in the country, banks may extend finance to public agencies and

not private builders for acquisition and development of land, provided it is a part of

the complete project, including development of infrastructure such as water

systems, drainage, roads, provision of electricity, etc. Such credit may be extended

by way of term loans. The project should be completed as early as possible and, in

any case, within three years, so as to ensure quick re-cycling of bank funds for

optimum results. If the project covers construction of houses, credit extended

therefore in respect of individual beneficiaries should be on the same terms and

conditions as stipulated for direct finance.

2.2.4 Terms and Conditions for Lending to Housing Intermediary Agencies

(i) In order to enhance the flow of resources to housing sector, term loans may be

granted by banks to housing intermediary agencies against the direct loans

sanctioned/ proposed to be sanctioned by the latter, irrespective of the per

borrower size of the loan extended by these agencies and such term loans would be

reckoned for the purpose of achievement of their housing finance allocation.

(ii) Banks can grant term loans to housing intermediary agencies against the direct

loans sanctioned/proposed to be sanctioned by them to Non-Resident Indians also.

However, banks should ensure that housing finance intermediary agencies being

financed by them, are authorised by RBI to grant housing loans to NRIs as all





housing finance intermediaries are not authorised by RBI to provide housing finance

to NRIs. Further, such finance granted by banks to housing finance intermediary

agencies against the latters’ on-lending to NRIs will not be treated as housing

finance for the purpose of scheme of yearly allocation of housing finance applicable

to banks.

(iii) Banks have freedom to charge interest rates to housing intermediary agencies

without reference to Benchmark Prime Lending Rates (BPLR)

2.3 Term Loans to Private Builders

In view of the important role played by professional builders as providers of

construction services in the housing field, especially where land is acquired

and developed by State Housing Boards and other public agencies,

commercial banks may extend credit to private builders on commercial terms

by way of loans linked to each specific project. However, the banks are not

permitted to extend fund based or non-fund based facilities to private

builders for acquisition of land even as part of a housing project. The period

of credit for loans extended by banks to private builders may be decided by

banks themselves based on their commercial judgment subject to usual

safeguards and after obtaining such security, as banks may deem

appropriate. Such credit may be extended to builders of repute, employing

professionally qualified personnel. It should be ensured, through close

monitoring, that no part of such funds is used for any speculation in land.

Care should also be taken to see that prices charged from the ultimate beneficiaries

do not include any speculative element, that is, prices should be based only on thedocumented price of land, the actual cost of construction and a reasonable profit

margin.

It is advised that banks adhere to the National Building Code (NBC)

formulated by the Bureau of Indian Standards (BIS) in view of the importance





of safety of buildings especially against natural disasters. Banks’ may

consider this aspect for incorporation in their loan policies.

CONSTRUCTION ACTIVITIES ELIGIBLE FOR BANK CREDIT AS FINANCE:

The following types of bank credit will be eligible for being treated as housing

finance.

(i) Loans to individuals for purchase/construction of dwelling unit per family and

loans given for repairs to the damaged dwelling units of families

(ii) Finance provided for construction of residential houses to be constructed by

public housing agencies like HUDCO, Housing Boards, local bodies, individuals, co-

operative societies, employers, priority being accorded for financing construction of

houses meant for economically weaker sections, low income group and middle

income group.

(iii) Finance for construction of educational, health, social, cultural or other

institutions/centers, which are part of a housing project and which are necessary for

the development of settlements or townships;

(iv) Finance for shopping complexes, markets and such other centers catering to

the day to day needs of the residents of the housing colonies and forming part of a

housing project and

iv) Finance for construction meant for improving the conditions in slum areas for

which credit may be extended directly to the slum-dwellers on the guarantee of the

Government, or indirectly to them through the State Governments.

(vi) Bank credit given for slum improvement schemes to be implemented by Slum

Clearance Boards and other public agencies;





(vii) Finance provided to:

(a) the bodies constituted for undertaking repairs to houses, and

(b) the owners of building/house/flat, whether occupied by themselves or bytenants, to meet the need-based requirements for their repairs/additions, after

satisfying themselves regarding the estimated cost (for which requisite certificate

should be obtained from an Engineer/Architect, wherever necessary) and obtaining

such security as deemed appropriate;

(viii) Housing finance provided by banks for which refinance is availed of from

National Housing Bank (NHB);

(ix) Investment in the guarantee/non-guaranteed bonds and debentures of

NHB/HUDCO in the primary market, provided investment in non-guaranteed bonds

is made only if guaranteed bonds are not available.

CONSTRUCTION ACTIVITIES NOT ELIGIBLE FOR BANK CREDIT

Banks should not grant finance for construction of buildings meant purely for

Government/Semi-Government offices, including Municipal and Panchayat

offices. However, banks may grant loans for activities, which will be

refinanced by institutions like NABARD.





Projects undertaken by public sector entities which are not corporate bodies

(i.e. public sector undertakings which are not registered under Companies Act

or which are not Corporations established under the relevant statute) may not

be financed by banks. Even in respect of projects undertaken by corporate

bodies, as defined above, banks should satisfy themselves that the project is

run on commercial lines and that bank finance is not in lieu of or to substitute

budgetary resources envisaged for the project. The loan could, however,

supplement budgetary resources if such supplementing was contemplated in

the project design. Thus, in the case of a housing project, where the project is

run on commercial lines, and the Government is interested in promoting the

project either for the benefit of the weaker sections of the society or

otherwise, and a part of the project cost is met by the Government through

subsidies made available and/or contributions to the capital of the institutions

taking up the project, the bank finance should be restricted to an amount

arrived at after reducing from the total project cost the amount of

subsidy/capital contribution receivable from the Government and any other

resources proposed to be made available by the Government.

Banks had, in the past, sanctioned term loans to Corporations set up by

Government like State Police Housing Corporation, for construction of

residential quarters for allotment to employees where the loans were

envisaged to be repaid out of budgetary allocations. As these projects cannot

be considered to be run on commercial lines, it would not be in order for

banks to grant loans to such projects.

FUTURE ASPECTS





High-margin slum redevelopment projects

Slum redevelopment (SRA) does not involve upfront investment in land

compared to the conventional real estate projects. The cost per sq ft in slum

redevelopment projects is around Rs3,000/sq ft v/s Rs5,000–6,000/sq ft (including

land cost) on freehold land due to high property prices in Mumbai. Slum

redevelopment also has high entry barriers, as it requires expertise and experience

to deal with government agencies and slum dwellers regularly until the completion

of the project. In Mumbai, more than 54% of the population lives in slum clusters

situated in certain pockets of the city. A slum population of 7.5mn could translate

into 1.5mn families, with an average household size of five. This could translate into

SRA potential of 644mn sq ft and revenue potential of Rs2,000bn for redevelopers.

HDIL, the market leader in slum rehabilitation, is well poised to cash in on the

immense opportunity in the SRS segment. The company has executed close to

10mn sq ft of SRS projects in the last 15 years and is more competitive than other

developers in the fray. Thus, HDIL stands a good chance to win large SRA projects,

such as Dharavi—where rehab families could be of similar size to MIAL.

Execution of the airport project on track

The first phase of HDIL's MIAL project to rehabilitate 28,000 families is on

track and likely to get completed by September 2010, generating around 10mn sq

ft of TDR (Transfer Development Rights). The company will also get 2mn sq ft of FSI

for commercial development in the airport vicinity once the 28,000 families get

rehabilitated. We expect HDIL to sell 5mn–6mn sq ft of TDR annually over the next

five years on strong ongoing execution of the MIAL project, which will generate

further 37mn sq ft of TDR over the next 5–6 years. The MIAL project contributes

around 30% to our one-year forward NAV.





Rewarding new launches

During 1QFY2011, HDIL launched the first phase of The Meadows, Goregaon

West. The company sold 0.75mn sq ft in just two days of the launch. Further, the

company has launched the second phase of Premier, a 0.75mn sq ft residential

project in Kurla. HDIL has strategically deleveraged its business model by launching

various projects through the conventional route since March 2009, thereby reducing

its overdependence on the TDR market. The company has been able to pre-sell 75%

of its residential projects (5.7mn sq ft) launched since FY2009, thereby providing

Rs4,000cr of revenue visibility over FY2010–12E. HDIL has even managed to pre-

lease 20% of its commercial launches at its Andheri (Metropolis) project for

Rs140/sq ft. The company's recent launches have been successful on account of being launched at a 10–20% discount rate to prevailing market prices. Management

has indicated that it would adopt the same strategy for its forthcoming launches as

well. In FY2011, HDIL plans to launch new projects of 5mn–6mn sq ft, largely in

Mumbai (including Siddharth Nagar, Goregaon; Ekta Nagar, Kandivali; and Pant

Nagar, Ghatkopar).

Low acquisition cost

The average cost of land is about Rs 200 per sq ft. Further, the land bank is

mainly situated in urban locations, where realizations are high.

Presence across all real estate segments

HDIL has three lines of business: (1) real estate development of residential,

commercial and retail projects; (2) slum rehabilitation and development; and (3)

land development including creation of infrastructure for sale for other developers.





HDIL‘s projects cover all segments (in million sq ft)

SRS Non-SRSSegment Ongoin

g

Planne

d

Ongoin

g

Planne

dResidential 1.6 29.5 57.6Commercial 3.5 0.1 8Retail 0.6 7.5 11.2Mixed including TDR 20.8TOTAL 5.7 20.8 37.1 76.8

Residential projects

Residential projects involve the construction of multi-storied apartment

buildings. HDIL also develops and construct township projects, which are self

contained planned communities with mixed residential and commercial or retail

space.

Commercial projects

These projects are medium-sized and mostly are targeted at established

financial and service sector companies. HDIL also build multiplexes, either as

standalone structures or within malls. After construction of a commercial project, it

generally sells the commercial space to individual buyers and retains no ownership

or management responsibilities.

De-risked business model

HDIL has a de-risked business model which balances its short-term and long

term project initiatives. It is present across all segments, residential, commercial,





retail and SRS projects. The company plans to develop 32 projects. Out of these, 21

are at various stages of completion. HDIL’s SRS projects are characterised by a

lower asset cycle risk as against its non-SRS projects, which involve a one-time

upfront payment for the land parcel.

Vasai-Virar SEZ

HDIL has announced plans to set up a 5,547-acre special economic zone (SEZ)

in the Vasai-Virar region near Mumbai. The company plans to set up a 2,500- acre

multi-product SEZ in the first phase. It has already received an in-principle approval

from the state for this development. To support this project, the company is also

planning to set up a power plant and a jetty for coal import.

Entertainment

HDIL has decided to enter the entertainment sector under the brand name

Broadway. HDIL will invest close to Rs 1,000 crore to fund its organic as well as

inorganic expansion in the country’s multiplex market. This new venture will offer

films through its multiplexes and will have a range of gaming centres with food

court that will be managed by Broadway. HDIL will set up its first Broadway theatre

in Vasai. This will be followed with the opening of the Broadway entertainment

centre at Kandivli shortly.

Recent developments

We believe the repeal of ULCRA would result in hastening of development

activity as developers would not need to go through the protracted process of

getting NOCs (no-objection certificate). It also provides an increased opportunity for

developers ti tie-up with mill land owners in order to launch large projects as there

will no restriction on the land area.


Due Diligence in Real Estate 1

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