SELF CERTIFICATION BY THE INTERN

I hereby certify that I, ADITYA KUMAR SINGH have successfully completed my

internship with “JAIPRAKASH ASSOCIATES LIMITED” in the month of JUNE, 2010

from 19th April to 19th June. This is also to certify that this report is an original product and

no unfair means like copying etc have been used for its completion.

Name: ADITYA KUMAR SINGH

Signature:

Date:

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CERTIFICATE FROM THE ORGANIZATION

This is to certify that Mr. ADITYA KUMAR SINGH has successfully completed his

internship with us in the month of June, 2010 from 19th April to 19th June. We wish him/her

all the best for all his future endeavors.

Name of the Supervisors: Mr. PIYUSH SRIVASTAVA Mr. APURVA GAUR

Manager (Sales) Senior Manager (Sales)

Signature:

Date:

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ACKNOWLEDGEMENT

Behind every fruitful endeavor lie the advice, guidance and inspiration of all people directly

or indirectly involved with the report. I wish to express my gratitude to all the people

involved in the completion of the report. They have been a constant of support for me. I

would also like to thanks to “Jaiprakash Associates Limited” who accepted me in spite of my

inexperience in the field and gave me the opportunity to work with them.

The feeling of esteem and euphoria on the completion of this Summer Internship Project will

be worthless without thanking for the immense help and guidance received from Mr. Pavan

Bhargava (Vice President Sales), Mr. Apurva Gaur (Senior Manager Sales) and Mr.

Piyush Srivastava (Manager Sales). I am indeed very thankful to them, for there unending

support right from the inception of this work. They continuously spared their precious time

and provided me right guidance at every stage. I sincerely thank them for providing me with

guidance, support and encouragement which has enabled me to complete the project

successfully. I would also like to express my gratitude towards my faculty supervisor Prof.

H.S. Shekhawat for giving me directions and guidance at the time when most needed and for

helping me during my internship.

I would also like to thank all the faculty members of Jaypee Business School, for their full

support in making the project enriching and informative and providing requisite facility in

due course of the internship. Their constructive criticism of approach to the problem and the

result obtained during the course of this work has helped me to a great extent in bringing

work to its present shape.

ADITYA KUMAR SINGH

Table of Contents3 | P a g e

EXECUTIVE SUMMARY…………………………………………………….6

COMPANY PROFILE………………………………………………………..8

JAYPEE INFRATECH LIMITED…………………………………………………13

THE ROLE OF JAYPEE GROUP……………………………………………...…16

JAYPEE GREENS……………………………………………………………….20

INDUSTRY ANALYSIS……………………………………………………..27

BASIC FRAMEWORK…………………………………………………………...27

MARKET OVERVIEW…………………………………………………………..29

PORTER’S FIVE FORCE MODEL ANALYSIS…………………………………...38

PEST ANALYSIS………………………………………………………………..39

INDUSTRY COMPETITORS………………………………………………….....43

FINANCIAL ANALYSIS……………………………………………………47

RATIO ANALYSIS………………………………………………………….......47

COMPARISON BETWEEN JAIPRAKASH ASSOCIATES LTD. & UNIECH……….57

CASH FLOW ANALYSIS……………………………………………………….58

ANNUAL RESULTS IN BRIEF………………………………………………….60

PROJECT INTRODUCTION………………………………………………..61

OBJECTIVES OF THE STUDY………………………………………………….62

NATURE & SCOPE OF THE STUDY……………………………………………62

RESEARCH METHODOLOGY………………………………………………….63

DATA SAMPLING………………………………………………………………63

DATA COLLECTION…………………………………………………………...63

DATA ANALYSIS TOOL………………………………………………………...64

DATA ANALYSIS……………………………………………………………….65

FIRST PULL FACTOR…………………………………………………..65

FACTORS DETERMINING THE CHOICE OF HOUSING COMPLEX…….66

IN-LOCALITY FACTORS……………………………………………….67

INVESTMENT PREFERENCE…………………………………………...72

ANALYSIS OF GREATER NOIDA………………………………………73

PREFERRED METHOD OF FINANCING…………………………..73

REASONS FOR SHIFTING……………………………………….74

ANALYSIS OF NOIDA………………………………………………….77

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PREFERRED METHOD OF FINANCING………………………….77

REASONS FOR SHIFTING………………………………………78

ANALYSIS OF GURGAON……………………………………………...81

PREFERRED METHOD OF FINANCING………………………….81

REASONS FOR SHIFTING………………………………………82

ANALYSIS OF FARIDABAD……………………………………………85

PREFERRED METHOD OF FINANCING…………………………85

REASONS FOR SHIFTING………………………………………86

ANALYSIS OF GHAZIABAD…………………………………………..89

PREFERRED METHOD OF FINANCING…………………………89

REASONS FOR SHIFTING……………………………………...90

INVESTOR PERCEPTION TOWARDS CITIES OF NCR………………..93

LOCATION…………………………………………………….93

BUSINESS HUB………………………………………………..94

QUALITY OF LIVING………………………………………….96

LAW & ORDER……………………………………………….97

INFRASTRUCTURE……………………………………………98

RECOMMENDATIONS………………………………………………….100

CONCLUSIONS…………………………………………………………101

KEY LEARNINGS………………………………………………………103

ANNEXURE…………………………………………………………….104

REFERENCES…………………………………………………………..110

EXECUTIVE SUMMARY

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Jaypee Group is a promising well diversified infrastructural conglomerate in India expanding

rapidly to an increasing demand from market on differentiated areas including:

Engineering and Construction

Cement

Power

Hospitality

Real Estate

Expressways and Highways

The objective of this report is to understand the investors’ perception about their Real-Estate

investments in the cities of NCR. The study is a research based project based upon primary

data collected with the help of questionnaires. The research involves respondents from the

five cities of NCR viz. Noida, Greater Noida, Gurgaon, Faridabad and Ghaziabad.

The report provides insight to the various factors considered by the investors while making a

Real-Estate investment in the cities of NCR. The study also aims to determine the possible

causes for the people to shift from their current location to one of the aforementioned cities.

The report suggests the various plausible factors for the investors to invest into Real-estate in

these cities instead of making similar investments in Delhi. The study aims to maximize the

possibilities of increasing such investments by analyzing the collected data. The project

incorporates various analytic tools and techniques.

The research reveals that one of the most important First-Pull factor for the investors is the

location of the site. The most basic factor that affects the choice of a particular housing

complex for an individual investor is its Price range. The basic amenities such as Water and

Power Backup are implied to be existent by the investors while Maintenance and

Safety/Security along with Quality of Construction play a major role in the investment

process.

Condominiums, Rental property and Land related investments remain at the top of investors’

preference lists. For almost all the five cities, Loan(s) from a Financial Institution remains as

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the most preferred method for generation of finance for the deals while the reason people

may want to shift from their current locations to the NCR vary from city to city.

On the basis of Location Noida was the first preference of the investors while as a Business

Hub, Gurgaon tops the list. Taking into consideration the Law & Order situation and

Infrastructural development, Gurgaon takes the lead however it lay below the city of Noida

under the head Quality of Living. Greater Noida is one of the fastest emerging competitors

closely following Noida and Gurgaon under all the heads and with the various projects being

undertaken in the region, path ahead seems very bright indeed.

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COMPANY PROFILE

JAIPRAKASH ASSOCIATES LIMITED

Vision of the company

As a group, we are committed to strategic business development in infrastructure, as the key

to nation building in the 21st century. We aim to achieve perfection in everything we

undertake with a commitment to excel. It is the determination to transform every challenge

into opportunity; to seize every opportunity to ensure growth and to grow with a human face.

Mission of the company

Our solitary Mission is to achieve Excellence in every sector that we operate in - be it

Engineering & Construction, Cement, Real Estate or Consultancy. To augment our core

competencies and adopt the most comprehensive modern technology to overtake the

obstacles in our path of achievement. To obtain sustainable development and simultaneously

enhancing the shareholders value and fulfilling our obligations towards building a better

India.

Quality Policy of the company

To become globally competitive in Infrastructure sector with commitment to conform to the

customer requirement through continual improvement and optimal utilization of resources

while growing with a human face.

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Jaiprakash Associates Ltd, the flagship of the Jaypee Group, is an Infrastructure

conglomerate focused on Engineering & Construction of hydro power stations, cement,

expressways & real estate. It undertakes large-scale engineering projects involving the

construction of dams and power stations. JPA owns a controlling stake in two hydro plants

totalling to 700MW and is currently setting up another 1,500MW thermal power plants,

1,000MW hydro unit and claims concession for another 3,245MW hydro stations. It is also

doubling its cement capacity and has interests in hotels & hospitality sectors.

Achievements - JPA last 5 years

The 3rd largest cement company in India

One of the largest land-bank holders in India

A power capacity holder of repute with a coal mine

An Engineering &Construction company without dependence on external orders

A road asset holder

An executor of a Formula 1 project.

Future Prospects

The company demonstrated excellent FY09 outlook on real estate and construction segments.

With the award of Ganga and Yamuna Expressway projects, the company’s order book has

moved up to US$10 bn which is almost 10 times its FY08 consolidated sales. The

construction division is expected to show a significant increase in growth in FY10. It is also

expected that real estate revenues will remain a strong growth driver over the next quarters

on the basis of orders in hand and completion of projects.

The production of cement is expected to jump by 50% to over 10 MTPA. The Company

plans to take this up to 30.5mtpa by 2011.

According to the company, the installed cement capacity is expected to double this year, to

almost 20 MTPA, This growth coupled with the growth in E&C and the real estate division is

expected to double sales and PAT in FY09. Also ‘JP Power ventures’ owning two power

assets (hydro and thermal plants) is expected to list in FY09 provided the market also

favours.

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The Company Board

Jaiprakash Gaur, Founder Chairman

Manoj Gaur, Executive Chairman & CEO

Sunil Kumar Sharma, Executive Vice Chairman

Sarat Kumar Jain, Vice Chairman

A.K. Sahoo (LIC Nominee)

K.P. Rau (IDBI Nominee)

Gopi K. Arora

R.N. Bhardwaj

S.C. Bhargava

B.K. Goswami

B.K. Taparia

S.C. Gupta

M.S. Srivastava

Sunny Gaur, Managing Director (Cement)

Pankaj Gaur, Joint Managing Director (Construction)

R.K. Singh, Whole-time Director

Ranvijay Singh, Whole-time Director

S.D. Nailwal, Director (Finance)

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Subsidiaries & Associate Companies

The Company has 17 subsidiaries & 9 Associate Companies:

Subsidiary Companies [including their subsidiaries]:

Jaiprakash Hydro Power Limited

Jaiprakash Power Ventures Limited

Jaypee Karcham Hydro Corporation Limited

Jaypee Infratech Limited

Himalayan Expressway Limited

Jaypee Ganga Infrastructure Corporation Limited

Bina Power Supply Company Limited [subsidiary of Jaiprakash Power Ventures

Limited.

Jaypee Hotels Limited

Jaypee Cement Limited

Gujarat Anjan Cement Limited [subsidiary of Jaypee Cement Limited]

Joint Venture Subsidiaries:

Madhya Pradesh Jaypee Minerals Limited

Bhilai Jaypee Cement Limited

Bokaro Jaypee Cement Limited

Jaypee Powergrid Limited [Joint Venture Subsidiary Company of Jaiprakash Hydro

Power Limited]

JPSK Sports Private Limited

Gujarat Jaypee Cement and Infrastructure Limited

Jaypee Arunachal Power Limited [Joint Venture Subsidiary Company of Jaiprakash

Power Ventures Limited]

Associate Companies:

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Jaypee Ventures Private Limited

Jaypee Development Corporation Limited

Jaiprakash Kashmir Energy Limited

JIL Information Technology Limited

Gaur & Nagi Limited

Indesign Enterprises Private Limited

Sonebhadra Minerals Private Limited

RPJ Minerals Private Limited

Jaypee Petroleum Private Limited

Jaypee Hydro Carbons Private Limited

Jaypee Spa Infocom Limited

Corporate Social Responsibility

During the year 2009-10, the Company continued with its initiatives for providing

occupational health care for the employees and their families on site and for the community

around Jaypee Cement Plants at Rewa and Bela. Covering the entire spectrum of the

Company’s CRDP philosophy, villagers from a large number of villages had access to Jaypee

Nagar and Jaypee Puram Hospitals, drinking water facilities were extended to more people,

training on hygiene was imparted to a large number of villagers and one mobile van with

medical facilities was provided for the purpose of community health for distant village.

Public roads in the vicinity of the plants were improved through maintenance. Various

schools and Industrial Training Institutes are run at various sites of the Company to impart

education to the children of surrounding villages.

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JAYPEE INFRATECH LTD.

JAYPEE INFRATECH LTD. is an Indian infrastructure development company engaged in

the development of the Yamuna Expressway and related real estate projects. The Company,

which is a part of the Jaypee Group, was incorporated on April 5, 2007 as a special purpose

company to implement the Concession. It holds the Concession from the YEA to develop,

operate and maintain the Yamuna Expressway in the state of Uttar Pradesh, connecting

Noida and Agra. The Concession also provides for the right to develop 25 million square

metres (approximately 6,175 acres) of land along the Yamuna Expressway at five locations

for residential, commercial, amusement, industrial and institutional purposes.

The business model consists of earning revenues from traffic and related facilities on the

expressway during the 36-year Concession period and development of associated real estate

pursuant to the Concession.

The Company is developing the Yamuna Expressway which is a 165-kilometre access-

controlled six-lane concrete pavement expressway along the Yamuna river, with the potential

to be widened to an eight-lane expressway. The expressway will be entirely in the state of

Uttar Pradesh. The expressway is planned to begin at the existing Noida-Greater Noida

Expressway, pass through various proposed SEZs and the proposed Taj International Hub

Airport and end at District Agra. The Concession follows a build operate-transfer (BOT)

model pursuant to which the company has the right to earn toll revenue for a period of 36

years following the award of a certificate of completion of the expressway. At the end of the

Concession period, the expressway will be transferred to the YEA without any payment to

the company under the terms of the Concession Agreement. The Company estimates that

approximately 4,042 acres of land are required for construction of the expressway which is

expected to be acquired by the YEA and leased to the company, of which the company has

taken possession of approximately 3,846 acres as of October 31, 2009.

The company estimates that approximately 1,018 acres are additionally required for

construction of related structures (such as toll plazas) which are expected to be acquired by

the YEA and leased to the company, of which the company had taken possession of

approximately 183 acres as of October 31, 2009.

Construction of the Yamuna Expressway is required to be completed by April 2013 under the

Concession Agreement, though based on the progress achieved so far, the company currently

expects construction to be completed by 2011.

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Under the Concession Agreement, the company has also been provided the right to develop

6,175 acres of land to be acquired by the YEA and leased to for a 90-year term, which is

expected to consist of 1,235 acre parcels at each of five different locations along the Yamuna

Expressway: One location in Noida, two locations in District Gautam Budh Nagar (part of

NCR) and one location in each of District Aligarh and District Agra. Of the total 6,175 acres

for real estate development, the company had signed lease deeds and taken possession of

approximately 3,079 acres as of October 31, 2009, all of which is located in Noida and the

Parcels in District Gautam Budh Nagar. Across the five land parcels for real estate

development, it is expected that approximately half of the land that will be developed will be

sold for residential use, approximately one third will be for commercial use and the balance

will be for institutional use and open space. The Company has initiated development of

Noida land parcel and are presently developing an aggregate 13.09 million square feet of

saleable area across three residential projects, which were approximately 88% sold on a

square foot basis as of October 31, 2009.

These three projects were launched between November 2008 and July 2009 and are expected

to be completed by 2012.

For the year ended March 31, 2009, total revenues were Rs. 5,562.57 million and restated

net profit after tax was Rs. 2,667.31 million. In the six months ended September 30, 2009

total revenues were approximately Rs. 276.45 million and the restated net profit after tax

was approximately Rs. 103.20 million. Further it is expected the company will earn toll and

other expressway-related revenues from the Yamuna Expressway starting in Fiscal 2012,

following completion of construction of the expressway.

MANAGEMENT STRUCTURE

Jaypee Infratech Limited

Shri Sameer Gaur, Whole time Director

Smt Rita Dixit, Whole time Director

Shri Har Prasad, Whole time Director

Shri Sachin Gaur, Whole time Director

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Shri Anand Bordia, Whole time Director

Shri S.K. Dodeja, Whole time Director

Value unlocking in Jaypee Infratech

Jaypee Infratech, owner of the Taj Expressway now Yamuna Expressway project remains

100% subsidiary of JP Associates. It’s a very prestigious project and expressway construction

will require investment in excess of Rs 6,000 crore. In March JPA raised Rs 250 crore by

selling 1% stake in Jaiprakash Infratech to ICICI Bank, valuing the special purpose vehicle at

Rs 25,000 crore. The company also secured a long term loan of Rs 900 crore from ICICI

Bank. The real estate value in the company needs to be unlocked either by way of

disinvestment or revenue from the real estate sale.

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THE ROLE OF JAYPEE GROUP

Jaiprakash Associates Limited (JAL), which is part of the Jaypee Group, owns 99.1% of the

Equity Shares. JAL is the flagship company of the Jaypee Group. The Jaypee Group is a

diversified infrastructure conglomerate in India with interests in the areas of civil engineering

and construction, cement, power, real estate, expressways, hospitality, golf courses and

education. JAL has over 40 years of experience in the civil engineering and construction

sectors in India, as a well-known construction company or as a member of consortia and joint

ventures. In particular, JAL has a strong project implementation track record as a

hydroelectric power construction company and has participated in projects that have added

8,840 MW of hydroelectric power capacity to the national power grid from calendar year

2002 through calendar year 2009. JAL was awarded the Concession by the YEA.

Subsequently, this Company was incorporated in 2007 as a special purpose company

pursuant to the Concession Agreement and JAL transferred the Concession to our Company.

The company will benefit from JAL’s expertise for the design, development and completion

of the Yamuna Expressway Project, as well as from its experience in the conceptualization,

design, development, construction and operation of large projects. In particular, the Jaypee

Group provides with design and engineering services (including with respect to toll plazas

and the toll system), the selection, engagement and oversight of consultants and

subcontractors and certain building materials in connection with the planned Yamuna

Expressway. The Jaypee Group also provides concept planning, construction, and sales and

marketing services and related corporate services in connection with the real estate projects

under development at Noida.

Competitive Strengths

The following are primary competitive strengths:

Ability to leverage the Jaypee Group’s technical capabilities; project management

expertise and execution skills.

Strength of the Jaypee Greens Brand.

Integrated development with real estate projects being developed alongside an

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Strong Regional Growth Prospects.

Large and mostly contiguous land reserves among three parcels in the NCR acquired

at the YEA’s acquisition cost and with significant land use flexibility.

Single state location of the entire Yamuna Expressway.

Strong and experienced management team, well-trained workforce and streamlined

operating Processes.

Competitive Strategies

The following are the strategies which the company has adopted to achieve commercial

success in the Real-Estate development projects along with the associated Yamuna

Expressway:

Maintain flexibility to adapt the real estate development plans to market conditions

over the long term and ability to adjust the development plans based on the progress

of regional growth and expressway traffic.

Exploit modern construction technologies to reduce construction time of the Yamuna

Expressway under development.

Reduce travel time and increase expressway operating revenue through the use of

automated toll collections at the Yamuna Expressway.

Develop real estate projects with broad market appeal.

Leverage the Jaypee Greens brand and the Jaypee Group’s expertise and technical

capabilities.

Jaypee Initial Public Offering

Jaypee Infratech tapped the capital market to raise a maximum of Rs 1,650 crore. The issue,

opened on April 29 and ended on May 4, had a fixed price band of Rs 102-117 a share. There

was a 5% discount to the issue price for retail investors. The Issue comprises a Fresh Issue

and an Offer for Sale.

The Proceeds of Fresh Issue

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The activities for which funds are being raised by our Company through this Issue, after

deducting the proceeds from the Offer for Sale:

(i) To partially finance the Yamuna Expressway Project; and

(ii) General corporate purposes.

In addition, our Company expects to receive the benefits of listing of the Equity Shares on

the Stock Exchanges.

Utilisation of Proceeds of the Fresh Issue

The details of the proceeds of the Fresh Issue are:

Gross proceeds to be raised through this Fresh Issue are Rs.1650.00/- crores.

Requirement of Funds

The main objects clause of the issue is to undertake the existing activities of the Company

and the activities for which funds are being raised by our Company through this Issue

particularly the Yamuna Expressway Project.

The listing

Jaypee Infratech is understood to have fixed the listing price for its initial public offer at Rs.

102, the lower end of the price band, pegging the total raising from the issue at over Rs.

2,250 crores.

The National Capital-based infrastructure company had earlier fixed a price band at Rs. 102-

117 for the IPO, which was subscribed 1.24 times.

The listing price was fixed at the lower end of the price band. In this way, the company is

raising about Rs. 2,261 crores from the IPO. Through this public issue, the company had

planned to raise between Rs. 2,262 crores and Rs. 2,352 crores. However, Jaypee Infratech

will receive only Rs. 1,650 crores out of the total proceeds and the balance will go to its

holding company, JP Associates Ltd (JAL).

Jaypee Infratech plans to utilise Rs1, 500 crore of the IPO proceeds in the development of the

Yamuna Expressway.

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The issue, which was opened between 29 April and 4 May, received bids for 27.39 crore

shares against 22.17 crore equities on offer, as per the NSE data.

The IPO got maximum demand from qualified institutional buyers (QIB) and was subscribed

1.77 times in the portion reserved for them. QIBs include insurance firms, mutual fund

houses and foreign institutional investors.

In the HNI (high net worth individuals) segment, the public issue was subscribed 1.15 times,

whereas shares reserved for retail buyers and employees remained under- subscribed. In the

retail segment, the IPO got subscribed 61%, while in the employees’ portion, it was

subscribed just 10%.

Morgan Stanley India Company, DSP Merrill Lynch, Axis Bank, Enam Securities, ICICI

Securities, IDFC Capital, JM Financial Consultants, Kotak Mahindra Capital Company and

SBI Capital Markets were the book running lead managers to the issue.

The share listed at Rs.98, Rs4 below its issue price of Rs.102. The weak listing was due to

the sentiments of the market which indicated a bearish phase for the markets.

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JAYPEE GREENS

Jaypee Greens is the real estate arm of the Jaypee Group and since its inception in the year

2000 has been creating lifestyle experiences from building golf-centric premium residences

to building mega townships to building a self sustained mega city.

The 452-acre development at Jaypee Greens, Greater Noida is the maiden project of the

group that offers independent homes & luxury apartments along with an 18-hole golf course,

landscaped greens, lakes, a spa resort in collaboration with Six Senses, sports club with finest

sports facilities and commercial developments.

Spread over 1162 acres, Jaypee Greens, Noida is India’s largest township with an 18+9 hole

Graham Cooke golf facility combined with world class residences, golf courses, thematic

gardens, neighborhood social clubs, outdoor sports facilities, town center, spiritual center,

schools, hospital, commercial areas.

Their latest venture is the Jaypee Greens Sports City which is a diverse, progressive and vital

community spread over 2500 acres of land complete with a Motor Racing Track along with

other sports facilities, commercial zones, educational and medical facilities as well as

numerous recreational options along with various thematic residential districts such as the

Lake District etc.

Jaypee Greens Products

Kensington Apartment & Kensington Heights

Located in “Wish Town” at sector 131/133, Noida,

the apartments lie behind the commercial zone and

near Noida-Greater Noida Expressway. The

residential options include plots ranging from 153-

209-239-298 Sq-Yd. It has comparatively low

density as only 2200 families in 100 acres. It has institutional complex within 1 km of

walking distance and also has other amenities like club within the complex, sports facilities

such as table tennis, badminton etc. along with double level parking facilities.

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Wish Town Klassic

Wish Town Klassic is a gated community at Jaypee

Greens Noida. The first phase spread over 40 acres

offers apartment towers nestled in an 80% green area,

ensuring that all homes enjoy splendid views of

landscaped gardens & parks. The residential options

include Duplex Apartments offering 2, 3 & 4 BHK

units, with areas ranging from 97 Sq. Mtrs to 209 Sq. Mtrs (1045 Sq.Ft. to 2250 Sq.Ft.

approx.). The latest edition is Simplex Apartments offering 2 & 3 BHK units, with areas

ranging from 104 Sq. Mtrs to 132 Sq. Mtrs (1120 Sq.Ft. to 1420 Sq.Ft. approx.).

The Kallisto Town Homes

Kallisto in Greek means "The Most Beautiful". With

beautiful tree lined walkways and private gardens,

the Kallisto Court are exclusive fully finished two

storey Townhomes with a covered area of 325.16

Sq. Mtrs to 418.06 Sq. Mtrs (3500 to 4500 sq. ft.

approx.) Set ideally amidst the 18 & 9 hole Graham

Cooke golf facility, these homes offer breathtaking

views of the golf course, lakes and greens.

KOSMOS

The apartments have a close proximity to the Noida-

Greater Noida Expressway and will also be soon

connected to the Delhi Metro. Meticulously

designed these apartment towers offer 2, 3 & 3

bedroom with utility room. The Kosmos provides

access to a host of amenities like multiple clubhouses

with swimming pools & gymnasiums along with children play areas, educational facilities,

medical centers and many more of the integrated township.

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The Pavilion Heights

Situated on the Noida-Greater Noida Expressway,

Pavilion Heights at Jaypee Greens enjoys good

connectivity and location advantage with respect to

the city master plan and is just 10 minutes drive

from south Delhi. Pavilion Heights are the Fully-

finished, Modern, Hi-Efficiency apartments that

offer 2 BHK + Study and 3 BHK + Study Family Apartments. A few of these include 18 + 9

hole Graham Cooke designed Golf Facility, Social Clubs with a range of Health and

Recreational facilities, Town Centre with facilities like art galleries, restaurants & cafes,

high-street Retail, International Standard Medical Centre, Educational facilities from Kinder

crib to Pre-University levels etc.

The Pavilion Court

Strategically located, The Pavilion Court apartments

offer serene views of nature on one side and refreshing

golf views on the other. These are fully-finished,

modern, hi-efficiency apartments. Thoughtfully

designed, the apartment size ranges from 1 BHK Studio

Apartment with Study to 3 BHK Family Apartment with

Study. The Pavilion Court is a lifestyle product which offers a host of value-added features

like like-minded neighborhood, multi-level security system, piped gas line, 24 hr electricity

and water supply, split air-conditioning in all rooms, wooden flooring in bedrooms and

underground parking facility. With a range of health and recreational facilities, Town Centre

with facilities like art galleries, restaurants & cafes, high-street retails, a wide range of

educational facilities from kinder crib to pre-university levels and access to the international

standard medical centre developed within the township itself.

The Imperial Court

The Imperial Court at Jaypee Greens Noida are high-rise

towers that create a soothing ambience provided by the

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most surreal view of the landscaped greens permeating into your living room, dining room,

study and master bedroom. The interiors of apartments are conceptualized and designed with

materials that echo the new millennium with special stress on light pastel colors and clean

polished surfaces in the living & dining rooms and warm intimate surfaces in the bedrooms.

The Kalypso Court

The Kalypso Court at Jaypee Greens Noida are

masterfully crafted apartment towers which come with

their very own social clubs and other facilities and a

recreational destination for the entire family. The

apartments offer the ultimate escape from all but the

birds and the tranquil views of the greens and the parks. The large windows extend your gaze

beyond the interiors giving a sense of space.

Aman

Located at sector 151, Noida & Inspired by the

beautiful gardens, the community is located on

the Noida-Greater Noida Expressway. This

unique gated community will have natural

environments, chip & putt golf course, lush

landscaped parks, social amenities, aesthetically

planned and beautifully designed complex. The various choices on offer are 850-1200-1320

sq. feet. The product is complete with modern amenities like shopping complex, social clubs

with swimming pools, gymnasium, sports facilities like basket ball courts, badminton courts

etc.

Kingswood Oriental

Located in “Wish Town” at sector 128, Noida,

The Kingswood Oriental are premium individual

residences, adjacent to an 18 Hole Graham

Cooke Golf Course. It is a very exclusive

community of luxury villas providing perfect

23 | P a g e

living for the select few who have the taste of finer things and wants to explore the unique

luxury lifestyle. The community will have some special features since it is one of its kinds in

the region like Wi-fi enabled community, 24 hr housekeeping service, Laundry services,

Toddlers area, Oriental street lighting, Golf Carts for local transportation within the

community etc. Here the homes will have unique features like Use of wood & bamboo in the

design to go with an Oriental feel, Private Lap pool with filtration plant, Elevator provision,

Jacuzzi etc.

Kasa Isles

Located in “Wish Town” at sector 129, Noida

the landscaping and ambience of the project is

inspired from the Tuscan/Mediterranean style

of architecture. Parks and fountains with a

vast range of recreational facilities along with

a central club will ensure a hi-quality lifestyle

for its residents. The large plethora of sporting

facilities including multiple Tennis & badminton courts, a unique 5 a side footfall field,

jogging tracks along with a swimming pool and water facilities will interest the health

conscious and people in general.

Kensington Boulevard

The site is located in “Wish Town” at sector 131,

Noida. The uniqueness of the community is the

beautifully landscaped boulevards, as inspired

from its namesake in the UK. The Kensington

Central Apartments, with a total of approx 2500

units in these high-rise apartment blocks, the

apartments compliment the residential plots

community. The community will have facilities like

swimming pool, shopping areas and various sports facilities like table tennis, tennis, squash,

skating rings etc. Some of other facilities of the society will be double storey basement

parking, rose garden in front of 4 BHK, jogging space with open seating space and

environmental friendly design.

24 | P a g e

Jaypee Greens Sports City

Jaypee Greens has announced the launch of India’s first Sports City on the Yamuna

Expressway in Gautam Budh Nagar. The Jaypee Greens Sport City offers a unique model of

real estate development, with both residential and sports facilities together.  The arena

connects sports to life, a unique concept and is the first-of-its-kind venture in the social

infrastructure sphere of India. The City will have Motor Race Track spread over more than

875 acres. This internationally designed motor race track will have facilities to host a range

of motor sports. There will also be state-of-the-art international standard sports stadiums for

all major outdoor and indoor games including an ICC standard cricket stadium with

accommodating capacity of over a lakh spectators, along with exquisite hotels, restaurants

and recreational facilities spread all over the sports zone. The Sports City will have

various Residential Districts which would be built by the company in phases. The first

district will be the Country Homes, with sizes varying from 200 to 4000 sq mts. This will be

followed by Lake District with high, mid and lower end apartments, The city will have

features like uninterrupted water and electricity supply from Jaypee Group’s own power

generation plants, round the clock 3 tier security, super specialty health facilities and

25 | P a g e

educational facilities ranging from Kinder crib to professional levels.

Come, live the pulsating life at a unique one-of-a-kind city in India, the 2500 acres * Jaypee

Greens Sports City. It comprises, perfectly crafted Country Homes along with upcoming

Residential Lake District (Phase1) which include Villas, Town Homes and mid to high rise

apartments blocks with breath taking views of numerous perennial lakes and canals and

multiple social clubs etc. A massive Motor Racing Track, Cricket and other international

sports stadiums. The first Commercial District is equipped with elaborate financial,

recreational and civic centres. Replete with all modern facilities, the city offers regular water

supply, 24 hours electric power supply from Jaypee Group’s own power generation power

plants, centrally monitored 3-tier security system, super specialty medical facilities and

educational facilities from kinder crib to primary school to professional colleges etc.

26 | P a g e

INDUSTRY ANALYSIS

The Indian Construction Industry had recorded a consistent year-on-year growth (12%)

during 2000-2005, and it grew between 25%-30% during 2005-2010. The key drivers of this

growth are government investment in infrastructure creation and real estate demand in the

residential and industrial sectors.

The construction industry is the second largest industry of the country after agriculture.

Construction activity is an integral part of a country’s infrastructure and industrial

development. It includes hospitals, schools, townships, offices, houses and other buildings,

urban infrastructure (including water supply, sewerage, drainage); highways, roads, ports,

railways, airports, power systems, irrigation and agriculture systems etc. Besides the

construction industry generates substantial employment and provides a growth impetus to

other sectors though backward and forward linkages. It is essential therefore, that, this vital

activity is nurtured for the healthy growth of the economy.

With the present emphasis on creating physical infrastructure, massive investment is planned

during the Eleventh Five Year Plan. The construction industry would play a crucial role in

this regard and has to gear itself to meet the challenges in order to meet the intended

investment targets in time, the current capacity of the domestic construction industry would

need considerable strengthening.

Source: Cushman & Wakefield Report: Survival to Revival, Indian Realty Sector on the Path to Recovery, 2009

The construction sector has major linkages with the building material industry since

construction material accounts sizable share of the costs. These include cement, steel, bricks,

tiles, sand/aggregates, fixtures/fittings, paints and chemicals, construction equipments, petro-

products, timber, mineral products, aluminum, glass and plastics.

27 | P a g e

Industrial Framework

Indian construction industry is estimated to be around $120 billion and is expected to double

in the next 5 years. The Construction industry comprises establishments that are primarily

engaged in the construction of buildings or engineering projects (eg: highways and utility

systems). This may include new work, additions, alterations or maintenance and repairs. The

construction industry is divided into three major sectors:

The first is the construction of buildings (both residential and non-residential)

The second involves heavy and civil engineering construction such as utility systems,

land subdivisions and highways, streets and bridges.

Firms in these first two sectors are primarily engaged in contracts that include

responsibility for all aspects of individual projects and are commonly known as general

contractors.

The third major sector of the construction industry includes establishments in the

special trades, which are primarily engaged in activities to produce a specific

component (eg: masonry, painting and electrical work) of project.

Special trade contractors usually do the work of only one trade, such as painting, carpentry or

electrical work, or of two more closely related trades such as plumbing and heating. Beyond

fitting their work to that of the other trades, specialty trade contractors have no responsibility

for the structure as a whole. They obtain orders for their work from general contractors,

architects, or property owners. Repair work is almost always done on direct order from

owners, occupants, architects, or rental agents. Houses, apartments, factories, offices,

schools, roads and bridges are only some of the products of the construction industry.

The major construction industry sectors can be classified as follows

o Buildings & Factories

Institutional & Commercial Buildings

System and mass Housing & Industrial Structures for factories

o Transportation Infrastructure

Ports & Harbors and special projects

Roads, Airports and Runways

28 | P a g e

Bridges

o Hydel & Nuclear Power and Foundation Engineering

Hydropower and irrigation Projects

Nuclear Power, Space & Defense Projects

o Industrial Projects & Utilities

Thermal & Non-conventional Power

Hydrocarbon Construction & Pipelines

Minerals & Metals

Bulk Material Handling

Water Supply and Fluent Treatment

o Electrical Instrumentation & Communication

Industrial Electrification & Switchyards

Telecommunication

Instrumentation

o Development Projects

Roads

Bridges

Airports

IT parks

Water Supply Projects

Others

An Outlook of the Markets

The Indian Construction Industry had recorded a consistent year-on-year growth (12%)

during 2000-2005, and it grew between 25%-30% during 2005-2010. The key drivers of this

growth are government investment in infrastructure creation and real estate demand in the

residential and industrial sectors.

Over the years, more than half of the expenditure budget is spent on civil engineering works.

The construction industry sets in motion the process of economical growth in the country;

investment in this sector contributes 6.5% of GDP growth. Every Re. 1 investment in the

29 | P a g e

construction industry causes an Rs.0.80 increment in GDP as against Rs.0.20 and Rs.0.14 in

the fields of agriculture and manufacturing industry, respectively.

Source: International Monetary Fund, World Economic Outlook Update, July 2009 (Calendar Year Growth Rates)

Statistics over the period have shown that compared to other sectors, this sector of economic

activity generally creates 4.7 times increase in the incomes and 7.76 times increase in

employment generation potentiality. Sustained efforts by the Indian Construction industry

and the Planning Commission have led to assigning the industry status to construction today.

This means formal planning and above board financial planning will be the obvious

destination of the construction sector in the country, with over 3.1 crores people employed in

it.

Increasing demand for housing

Housing sector is poised to witness unprecedented demands. The main determinants of the

demand for housing are demographic. However other factors like income, price of substitutes

and price of compliments play a role.

The core demographic variable are population size and population growth the more people in

the economy, the greater the demand of housing. It is households that demand housing

services typically one household per house. The size and demographic composition of

households is variable and not entirely exogenous.

30 | P a g e

From an external point of view, housing is being considered more and more as an asset by

international investors as well as by Indians and expatriate funds into the housing sector.

From an internal point of view, the economic growth leading to rapid urbanization and

creation of a new middle class is the cornerstone of the sector. This along with changing

social norms leading to nuclear families ant the decreasing age of individuals purchasing

houses are fuelling demand for housing.

According to a study conducted by ICICI securities the size of an average urban household

decreased from 6.06 in 2001to 5.5 at present against the average household size in Europe

varying from 2.3 to 2.8. Rising income, greater number of income generators per household,

especially working women and the younger generation, and changing mindset are the

primary reasons for reduction in the household size.

It is expected that the household size will continue to decline in the next `10 years. A per

industry estimates, average age of a home buyer has decreased from 42 years to 31 years.

The younger generation is creating further demand for residential units and the trend should

continue as the income generation capability of the Indian youth grows. The diagram above

was a summarized illustration of the key factors that are driving housing demand in India.

Widening Demand- Supply Gap

The demand for the housing commercial buildings is very high, but the supply is limited. The

urban population is increasing very rapidly. Due to various key drivers of growth listed above

31 | P a g e

causing the market demand to increase more and more. It has been analyzed that residential

prices have increased by about 15-20% on average in the last one year . There has been

strong growth in demand supported by rising disposable incomes, low interest rates, fiscal

incentives on both interest and principal payments and increasing urbanization. In 1995 EMI

(Estimated Monthly Installments) as a part of salary was 54% as compared to 28% in 2007.

Also as per industry estimates, the average age of a house buyer has fallen from 42 to 31

years.

India’s booming infrastructure spend

Order inflows for construction companies continue to remain robust which is indication of

India’s booming infrastructure spend. As of 2008 order book of top eight construction

companies was at least twice their annual revenues of 2007-08. The infrastructure sectors are

needed to build in India apart from some of the metro cities such as roads, airports, power

plants. (India has to build new power plants to meet its future energy demand which is

growing phenomenally)

An increase in port capacity from 334 MT to 470MT by the end of Tenth Five year plan

envisaged. Investments around Rs. 163 billion planned. Privatization and up gradation of four

metro airports has been planned. A number of airports, including international airports at

Hyderabad and Bangalore are to be built. Investment of over Rs. 164 billion has been

proposed.

Another area where the demand far outstrips supply is the urban infrastructure amenities. The

government is stressing on large capacity addition in various segments of the sector. Urban

transportation, water supply and housing are some of the key areas. Other than a huge plan

outlay, private participation is also considerable. Special Economic Zone development is also

an area to look out for.

Investments upwards of USD55 billion planned. Plans are on to build or widen 14,162 Kms

and 105,000 of roads by the central sector (NHAI) and state sector respectively.

Opportunities in O&M of road projects are also substantial.

32 | P a g e

Public-private partnerships

Public-private partnerships have emerged as one of the significant modes of infrastructural

financing. The Government of India has taken several initiatives like viability gap funding,

Public Private Partnership Appraisal Committee (PPPAC) and India Infrastructure Finance

Company Ltd. (IIFCL) to promote PPPs. Viability Gap Funding is available up to twenty

percent of the total project cost, normally in the form of a capital grant at the stage of project

construction.

Under the VGF scheme, twenty three projects with the project cost of Rs. 11,114.7 crores

have been given in principle/final approval involving an estimated Viability Gap Funding of

Rs. 2,690.3 crores. IIFCL has so far approved 64 credit proposals involving assistance from

IIFCL amounting to Rs.14, 966 crores. For providing financial support for quality project

development activities to the States and the Central Ministries, a corpus fund titled India

Infrastructure Project Development Fund (IIPDF), with initial outlay of Rs. 100crore has

been set.

100% FDI in construction industry throughout automatic route

The government has allowed 100% Foreign Direct Investment in the construction industry

through the automatic route. Conditions restricting FDI to a minimum area of 100acres and

2000 dwelling units are relaxed to 25 acres and 50,000 square meters for the construction

development projects.

FDI Inflow in Real Estate and Construction (in USD million)

Fiscal2007

Fiscal2008

Fiscal2009

April 2009 through July

2009

Cumulative Inflow April

2000 through July 2009

Housing and Real-

Estate

467 2,179 2,801 1,181 6,693

Construction

(Including Roads and

Highways)

985 1,743 2,028 603 5,874

Source: Cushman & Wakefield Report: Survival to Revival, Indian Realty Sector on the Path to Recovery, 2009.

33 | P a g e

The decision ensured that FDI was “construction-centric” rather than “land-centric” in the

past. Foreign Investors could now come in any area but would have to construct at least

50,000 square meters within a timeframe so that they did not hold land for speculative

purpose.

Growth Insurgents

Booming Indian Economy

Over past few years the Indian economy continued on its robust growth path with the overall

growth in real gross domestic product at factor cost at 9.4% (2007-08). India was the second

highest contributor to world growth in 20006. Sustained high growth over the last four years

has made India the third largest economy after USA and China with its share in world GDP

rising from 5.5% in 2002 to around 7.5% in 2008.

The strong growth prospects of the Indian economy, high returns on equity and higher

interest rates coupled with rise in global private capital flows, have resulted in hue growth of

construction industry.

Growing housing and commercial space requirements

The housing needs of urban population are increasing day by day Urbanization of India is

important factor in this. Many industries are expanding to many cities beyond metros like

Mumbai, Delhi, etc. Many foreign industries are setting their plants in not so developed parts

of India.

34 | P a g e

Source: UBS Estimates

The urbanization of population rise of income levels, middle income groups has shown huge

interest in Commercial mall, multiplexes, organized retail which has given a boost to

construction industry. The mall space construction has shown substantial which can be seen

from the graph.

Government thrust on infrastructure, Government projects, initiatives etc.

Sustenance of growth is fully contingent on the creation of supportive infrastructure. Hence

the Government has been employing innovative options to develop infrastructure. Airport

modernization projects, Construction of roads bridges water supply projects and many other

government initiatives provided boost for construction industry.

The average real income of urban India and rural India is likely to grow by 5.7% and 3.6%

respectively by 2025. Moreover, India’s middle class is expected to expand by more than 10

times from its current size of 50million to 583 million people in next 18 years.

Therefore, all these estimates work out to make a strong case for higher loan GDP ratio so

that India and its population is able to keep a pace for meeting the demand for housing units.

Booming IT & ITES Sector

Almost 30-40% of land acquires have been IT companies. Not only are new companies

looking at setting in shop, but the existing companies such as IBM and Microsoft are also

expanding.

The notable transactions in Bangalore include companies such as Microsoft and IBM

committing to lease approximately 1, 00,000sq.ft and 2,00,000 sq.ft space respectively.

Gurgaon still remains a preferred destination for corporate that wanted space in Delhi. Some

prominent transactions included the lease of approximately 51,000sq.ft. by Hawett-Packard

in the Global Business Park 36,000sq.ft. by Convergys in Orchid Square 1,34,000sq.ft. by

Hewitt Associates in DLF Center Court and 8,500sq.ft. by Louis Berger.

The preference of IT & ITES companies for suburbs, due to availability of better quality

options at cheaper prices has led to an increase in demand for residential properties in these

areas, Thereafter, the emergence of good quality condominiums with additional amenities has

35 | P a g e

also led fuelled the demand for residential properties. However, despite the increasing

demand in these areas, the prices will remain unaffected in the medium term, owing to the

excess supply of stock.

Retail sector facilitating real estate growth

Apart from the IT & ITES industry influencing the Indian real estate sector, India is also

getting into the knowledge based manufacturing industry on a large scale. Retail, one of

India’s largest industries, has presently emerged as one of the most dynamic and fast paced

industries of our times with several players entering the market.

Source: UBS Estimates

The contemporary retail sector in India which is reflected in sprawling shopping centered and

multiplex-malls also contributing to large scale investments in the real estate sector with

major national and global players investing in developing the infrastructure and construction

of the retailing business. If industry experts are to be believed, the prospects of both the

sectors are mutually dependent on each other.

Another emerging trend is investment in the hospitality or hotel industry. The exceptional

boom in inbound tourism and the IT sector has also led to an unprecedented shortage of

rooms, with hotels all over the country witnessing their highest-ever occupancy rates.

Changing Age-Profile

36 | P a g e

As of 2006, about 55% of the population in the country is less than 25 years of age. This

compares favorably with China where the comparable number is 42%. According to Asian

Demographics Report, the 20-54 years age bracket is growing faster than the rest of the

population and will represent more than 50% of the population in 2013

Boom on Construction business are pressuring other associated business to change their

strategy and policies in favor this market. Bankers understand requirement of new type of

investors, who want to invest in this, are providing home loan to customers on lower interest

and under lots of schemes, also providing customers subsidy home loan, even builders

projects in India also dependent on bankers and their schemes. Government is launching

programs to attract property buyers and appreciating investors to buy property in INDIA.

Impact of each of these factors when looked upon in isolation may not be significant, but

when viewed in totality they offer enormous potential for housing market growth. Rising

income levels in combination with a reduction in average population age has over the years

resulted in the fall of average age of a house buyer. Analyst expects the trend to sustain in

due course of time.

37 | P a g e

Bargaining power of suppliers: “High”

Contractors are in short supply now. Jaypee has a construction division and is hence protected against cost pressures. Cement prices have also risen multi-fold, but given Jaypee being a major Cement producer as well, it would help bringing overall costs down to a large extent.

Th

reat o

f new

en

tran

ts: “

Med

ium

/Low

Jayp

ee’s

key s

tren

gth

s:

(1) T

he a

ward

of m

ajo

r hig

hw

ay p

roje

cts

en

su

res c

on

tinu

ou

s c

ash

flow

s.

(2) T

he la

nd

acq

uire

d b

y th

e c

om

pan

y o

n th

e b

asis

of th

e M

oU

betw

een

the G

overn

men

t an

d th

e fi

rm.

(3) a

nd

ab

ility to

colle

ct c

ash

up

fron

t du

e to

its re

pu

tatio

n fo

r timely

deliv

ery

.Th

ese E

nsu

re th

at it is

diffi

cu

lt to re

plic

ate

Jayp

ee’s

bu

sin

ess m

od

el in

its c

ore

mark

ets

.

Bargaining power of customers: “Medium/Low”

In residential, we feel end customers still have the upper hand. There is a severe shortage of Grade A commercial space in the key markets. Top grade retail space too seems to be in short supply and hence, mall owners are also in a better bargaining position.

Th

reat

of

su

bsti

tute

s:

“Low

”

Jayp

ee s

ells its

resid

en

tial p

rop

ert

ies.

We d

o n

ot

see s

erv

ice a

part

men

ts o

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ased

resid

en

tial ta

kin

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ff in

a b

ig w

ay d

ue t

o low

yie

lds a

nd

ten

an

cy r

igh

ts in

favou

r of

the t

en

an

t. O

rgan

ised

reta

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g is a

sm

all s

hare

of

the I

nd

ian

reta

il m

ark

et,

an

d w

e s

ee larg

e p

ote

nti

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r g

row

th.

Competitive rivalry in the industry: “Medium”

Jaypee is a leader in the NCR residential markets and faces little threat from competition. Also, Jaypee’s properties command a premium, be it residential or retail and lot of sales happen at the development stage itself. Further, as one of the more financially strong companies in the sector, Jaypee is better able to withstand a slowdown.

PORTER’S FIVE COMPETITIVE FORCES ANALYSIS

38 | P a g e

PEST ANALYSIS

POLITICAL FACTORS

SEZ to Boost Infrastructural Development

SEZ is the new destination for real estate investors. Currently 150 SEZ’s are approved out of

which 85 SEZ’s are into the IT? ITES area and 10-15 SEZ’s in the electronics area. 130

SEZ’s are developed by real estate developers which constitute of about 50% of the total SEZ

area. IT SEZ should be developed and made operational within the period of six months from

the date of notification. Thus, 130 approved SEZ’s would result in investment of US$10bn to

US$ 12bn immediately.

Cement prices Reduced for State Infrastructure projects

The continued thrust on infrastructure development will provide impetus to the healthy

growth in demand, protecting the bottom-line of cement companies to an extent. The

reduction in the CST in freight rates on diesel and limestone will be marginally positive for

some companies.

FDI Liberalization to Augment Industry Growth

Recent amendments by the government have made accessibility to the required capital much

easier. Opening of FDI in construction and allowing developers to raise capital in

international markets has led to developments of larger projects benchmarked against

international standard.

RBTs to Positively Affect Real Estate Business

The proposed introduction of RBMF (Real Estate Mutual Fund) and RBT (Real Estate

Investment Trust) will boost real estate investments from small investor’s point of view. This

will allow small investors to enter real estate market with contribution as less than Rs.10,

000. The concept of RBT is on the verge of entering India and would be structured as a

39 | P a g e

company dedicated to owning and in most cases operating income producing real estate as

apartments, shopping centers, offices & warehouses.

ECONOMIC FACTORS

Growth in construction activity Simulating GDP Growth

India is witnessing tremendous growth & expansion of construction activities and

construction is largest component of GDP. It has been growing at a rate over 10% in past few

years when GDP growth is around 8%. Within construction sectors such as roads, railways,

housing and power have been keen drivers.

Rate Hikes Unlikely to Slow Down Growth

It has been analyzed that residential prices have increased by about 15-20% on an average in

the last 2 years. There has been strong growth in demand supported by rising disposable

income, low interest rates, and fiscal incentives on both interest and principal payments and

increasing urbanization.

SOCIAL FACTORS

Shifting Consumption pattern to fuel Industry Growth

The consumption pattern of Indian Households is undergoing a gradual, but steady change.

The share of food and beverages, which used to constitute almost 50% of household spend

until 2005 fell to 45% by FY08. We expect the share of discretionary items to consistently

rise given the rising affordability and changing aspiration levels, increased exposure to

western lifestyles (through media as well as overseas travels) has altered the consumption

pattern of Indian people.

Rising Urbanization to boost Industrial Growth

Urban infrastructure consists of drinking water, sanitation, sewage systems, electricity and

gas distribution, urban transport, primary health services and environmental regulation. Many

of these services are in nature of local public goods with the benefits from improved urban

infrastructure. The urban population in India will grow by 85 million over the next 10 years.

40 | P a g e

Green buildings in India

The green building movement has gained tremendous momentum during 3-4 years, ever

since Green Business embarked on achieving the prestigious LEED rating for their own

centre at Hyderabad. The Platinum rating for green building has sensationalized the

stakeholders of construction industry. There is tremendous potential for construction of green

buildings in India. The estimated market potential for green building will be about $400

million by the end of 2010. There will be favorable policies of government which would

provide right impetus for advancing the green building movement in India.

TECHNOLOGICAL FACTORS

Low Technology Adoption to Hinder Growth

The poor state of technology adopted by the construction sector adversely affects its

performance. Upgrading of technology is required both in the manufacturing of construction

material and in construction activities. As a large number of construction materials are

manufactured in the unorganized sector, effective monitoring and regulation of the

production of these materials to ensure proper quality becomes difficult. Use of low-grade

technology in the construction sector leads to low value addition and low productivity, apart

from poor or substandard quality of construction and time overruns in the projects. The non-

availability of quality construction is the main reason for this. Besides the construction sector

also lacks information about new technology.

Construction as per Indian Requirements

The construction needs to be done as per Indian standards and requirements which will

demand considerable changes to meet up the International standards. The infrastructure

requirements of India are much different as the population spread, increasing urbanization,

increasing slums, the small space for roads, the water problems are more.

Ready-Mix-Concrete Being Experimented with

The ready mix concrete business is in its infancy. For example 70% of cement produced in

developed country like Japan is used by Ready Mix concrete business there. Here in India,

Ready Mix concrete business uses 2% of total cement production.

41 | P a g e

Much of construction done in India is very slow paced. The concrete making process at site

takes much time with variation in quality. The increasing use of ready mix not only saves on

time but allows the better quality. It will also eliminate the storage space at site, eliminate

procurement/hiring of plant and machinery, reduce wastages of basic material, noise and dust

at site will be reduced. Also organization at site will be streamlined. This will improve rate at

which infrastructure can be built in India.

COMPETITIVE LANDSCAPE

In the first five year plan, construction of civil works was allotted nearly 50% of the total

capacity outlay. The first professional consultancy company, National Industrial

Development Corporation (NIDC), was setup in the in the public sector in 1954.

Subsequently, many architectural, design engineering and construction companies were setup

in the:

Public sector - Indian Railways Construction Limited (IRCON), National Buildings

Construction Corporation (NBCC), Rail India Transportation and Engineering Services

(RITES), Engineers India Limited (EIL), etc.

Private sector – M N Dastur & CO. Hindustan Construction Company (HCC)

STRUCTURE

The Indian construction industry comprises of over 200 firms in the corporate sector. In

addition to these firms, there are about 1, 20,000 class a contractors registered with various

government construction bodies.

There are thousands of small contractors, which compete for small jobs or work as sub-

contractors of prime or other contractors.

Top Players

Companies like L&T, GMR Infrastructure, HCC, Gammon, Jaypee group, etc. Which

undertake huge projects

Companies like IVRCL, Nagarjuna, DLF, Unitech, Omaxe etc, dealing in flyovers,

pipelines, apartments and housing/office spaces.

42 | P a g e

INDUSTRY COMPETITORS

Unitech

Unitech is one of India’s three largest real estate developers and is the largest listed real

estate company in the country. Unitech entered civil engineering in 1974 and diversified

into real estate. The promoters hold 75% of the company.

Unitech 62%-owned by the Chandra family, is one of India's largest and most diversified

real estate companies. It is a leading developer of residential apartments, commercial/IT

parks and retail malls. It has a small business presence in power transmission,

prefabricated construction, paving block and ready mix concrete. Unitech has received

approval in principle to develop three SEZs in the country.

Innovative financing and structuring skills

The company aims to achieve its development plan by recycling its capital faster through

innovative financing schemes. The proposed schemes as per various reports include the

AIM (alternative investment market, in London) fund. Unitech would retain part stake in

the developed projects and would earn proportionate lease income and also earn

management fees. We think this circumvents the problems associated with FDI

participation at completed stage while retaining stakes in the specific projects.

Captive construction skills

Unitech’s origin was as a construction company. Given the significant increase in scale of

operations, we think this would be useful in scaling up operations. Already a significant

part of its workforce has been redeployed in its real estate/SEZ projects.

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Larsen & Tubro

ECC-the Engineering Construction & Contracts Division of L&T - is India’s largest

construction organization. Many of the country’s prized landmarks – its exquisite

buildings, tallest structures, largest industrial projects, longest flyovers, highest viaducts –

have been built by ECC Leading- edge capabilities of ECC cover every discipline of

construction: civil, mechanical, electrical and instrumentation engineering.

Investing for profitable growth

To build further on the successes achieved, the Company is investing in multiple spheres

– people, technology, capacity expansion both domestically & internationally and brand

building. This is essential for sustaining the growth momentum and continuous value

creation.

International Business – Strengthening presence beyond India

Coming to International business, Company continues to forge alliances and invest in

international business for enhancing capabilities and achieving its vision of becoming an

Indian multinational with focus in Middle East and China. Joint ventures have been set up

in Kuwait and Saudi Arabia for electromechanical construction in oil & gas, power and

infrastructure sectors. These initiatives will accelerate the Company’s thrust towards its

target of achieving 25% revenues from international business.

Capacity Expansion

The Company is expanding capacity internationally and within India. Substantial capacity

augmentation at Hazira will help to address the growing demand in oil& gas industry.

Electrical & Electronics division is expanding its capacity at Mysore, Ahmednagar, and

Mahape to take care of rapid growth in the sector. All the divisions of the Company have

planned increased investments in acquisition and installation of new equipment and

manufacturing facilities.

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Jaiprakash Associates

Jaiprakash Associates Ltd. the flagship of the Jaypee group is an acknowledged leader in

construction of river valley and hydro power projects on turnkey basis. It has had the unique

distinction of simultaneously executing 13 hydropower projects spread over 6 states in India

and Bhutan to generate 10,290 MW of power. The group has hydro power projects orders

worth Rs.10, 000 Crores.

Expansion Plans

The group’s focus in future will be on developing a 5000 MW power generation capacity

including wind and thermal by 2014 and further increase the presence in EPC and

construction contracts in Hydro power sector. The estimated installed capacity of the Group’s

cement business by the year 2010-11 is likely to be 20 million tons per annum.

Venturing in the construction industry

Jaiprakash Associates has bagged a lot of infrastructure projects in the near future which has

reflected in its performance. The latest and the biggest project which they are currently doing

is the Yamuna Expressway project on BOT basis which involves building of an expressway

from NOIDA to AGRA and it is also construction 5 major townships along the expressway.

The project cost is estimated to be around 10,000 crores.

COMPANY FINANCIAL PERFORMANCE

Swelling order book positions and conversion of the same into revenues has helped

construction companies to sustain growth momentum. Sales growth which vacillated in the

range of 15-20% in the earlier quarters accelerated over 30% in March and June 2009

quarters.

Industrial Growth Trends

Driven by positive growth in the economy, real estate in India is booming. The year 2006

started on a promising note when the Government of India opened the construction and

development sector in February 2006, and allowed 100 per cent foreign direct investment

(FDI) under the 'automatic route' in order to spur investment in the vital infrastructure sector.

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By 2015, it is projected that the market size would grow to $ 90 Billion. Estimates suggest

that the urban housing sector would require investments to the tune of $25 billion (Rs. 1.10

lakh crore) over the next five years. Prices have remained buoyant as new construction lags.

According to surveys, there was a shortage of 19.4 million units (12.7 million units in rural

areas and 6.7 million units in urban areas) in the country about three years ago, which will

require real estate in India.

It is invariably seen as the most lucrative sector with the booming land prices and higher

profitability all across the country. More and more international construction companies are

viewing it as a great opportunity with the new regime in terms of the growth prospective and

saturation of their respective local markets.

The factors favoring the real estate market in India, which currently is on a high growth

curve, are several – a booming economy, favorable demographics, government’s spending on

infrastructure and a liberalized FDI regime. Though there are still certain issues – land

reforms and absence of substantial tax incentives for real estate development - that need to be

addressed.

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FINANCIAL ANALYSIS OF JAIPRAKASH ASSOCIATES LTD.

Ratio Analysis

LIQUIDITY RATIO: -

Liquidity refers to the ability of a firm to meet its short-term (usually up to 1 year)

obligations. The ratios, which indicate the liquidity of a company, are Current ratio,

Quick/Acid-Test ratio, and Cash ratio.

Current Ratio

Meaning:

This ratio compares the current assets with the current liabilities. It is also known as

‘working capital ratio’ or ‘solvency ratio’. It is expressed in the form of pure ratio.

Formula:

Current Ratio=Current Assets/Current Liabilities

Current Ratio

Year Current Assets Current Liabilities Current Ratio

March '09 8510.58 5849.10 1.46

March '08 5648.25 4297.59 1.31

March '07 4266.84 2891.80 1.48

March '06 4226.81 2299.38 1.84

March '05 2511.13 1769.90 1.42

Conclusion

Here the current ratio comes out to be 1.46:1 in FY March ‘09. It means that for one

rupee of current liabilities, the current assets of 1.46 rupee are available with them.

Current ratio is on accepted level in the above respective 5 years and also it has

improved in March’09 than to March’08 indicating the soundness of the company.

This leads to increase the ability of the company to meets its obligations & therefore

from the point of view of creditors, the company becomes less risky.

The available working capital with the company is in increasing order (in crores).

March ‘09 – 2661.48

March ‘08 – 1350.66

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March ‘07 – 1375.04

March ‘06 – 1927.43

March ’05 – 741.23

The company also has sufficient working capital to meets its urgency/ obligations.

The company has a high percentage of its current assets in the form of working

capital, cash that would be more liquid in the sense of being able to meet obligations

as & when they become due.

Thus, the current ratio throws light on the company’s ability to pay its current

liabilities out of its current assets. The company has a very good liquidity position.

Quick Ratio

Meaning:

Quick ratio is also known as acid test ratio or liquid ratio. Quick ratio compares the

quick assets with the quick liabilities. It is expressed in the form of pure ratio.

Formula:

Quick Ratio=Quick Assets/Current Liabilities

Quick Ratio

Year Quick Assets Current Liabilities Quick Ratio

March'09 7252.88 5849.10 1.24

March'08 4641.40 4297.59 1.08

March'07 2978.55 2891.80 1.03

March'06 3012.19 2299.38 1.31

March'05 1911.49 1769.90 1.08

Conclusion:

The liquid or quick ratio indicates the liquid financial position of an enterprise.

Almost in all the corresponding 5 years the liquid ratio is somewhat same, which is

better for the company to meet the urgency. The liquid ratio of the company has

increased from 1.08 in March’08 to 1.24 in March ’09 which indicates that the day-

to-day solvency is sounder for company in March ‘09 over the year March ‘08.

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This indicates that the dependence on the short-term liabilities & creditors are less & the

company is following a conservative working capital policy. The liquid ratio shows the

company’s ability to meet its immediate obligations promptly.

Cash Ratio

Meaning:

This is also called as super quick ratio. This ratio considers only the absolute liquidity

available with the firm.

Formula:

Cash Ratio= (Cash + Bank + Marketable Securities)/Current Liabilities

Cash Ratio

YearCash + Bank +

Marketable securitiesCurrent Liabilities Cash Ratio

March'09 2908.59 5849.10 0.49

March'08 1815.44 4297.59 0.42

March'07 1429.81 2891.80 0.49

March'06 1669.80 2299.38 0.72

March'05 727.23 1769.90 0.41

Conclusion:

This ratio shows a regular up & down in the value as in March ‘05 the cash ratio is

0.41 then it is increased to 0.72 in the March ’06 while it is decreased to 0.49 in the

March ‘07 & to 0.42 in the March ‘08. But it finally increased to 0.49 in March ’09.

This indicates that the company has sufficient cash, bank balance, & marketable

securities to meet any contingency.

PROFITABILITY RATIO

These ratios help measure the profitability of a firm. A firm, which generates a substantial

amount of profits per rupee of sales, can comfortably meet its operating expenses and provide

more returns to its shareholders. The relationship between profit and sales is measured by

profitability ratios. There are different types of profitability ratios: Gross Profit Margin, Net

Profit Margin, and Operating Ratio.

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Gross Profit Margin

Meaning:

This ratio measures the relationship between gross profit and sales. It is defined as the

excess of the net sales over cost of goods sold or excess of revenue over cost. This

ratio shows the profit that remains after the manufacturing costs have been met. It

measures the efficiency of production as well as pricing. This ratio helps to judge how

efficient the concern is managing its production, purchase, selling & inventory, how

good its control is over the direct cost, how productive the concern , how much

amount is left to meet other expenses & earn net profit.

Formula:

Gross Profit Margin= (Gross Profit/Net Sales)*100

Gross Profit Margin (%)

Year Gross Profit Net Sales Gross Profit Margin (%)

March '09 1508.02 5979.46 25.22

March '08 957.20 3985.00 24.02

March '07 821.26 3442.00 23.86

March '06 549.68 3141.00 17.50

March '05 477.11 2742.00 17.40

Conclusion:

The gross profit is the profit made on sale of goods. It is the profit on turnover. In

March ’05 the gross profit ratio is 17.40% but it has increased to 25.22% in March

‘09 due to increase in sales without corresponding increase in cost of goods sold.

Operating Profit Margin

Meaning:

This ratio indicates profitability from a firm’s main operating activities. A higher

operating profit margin implies better sales realization and effective cost control. It

shows the relationship between operating profit & the sales. It is equal to gross profit

minus all operating expenses or sales less cost of goods sold and operating expenses.

Formula:

Operating Profit Margin= (Operating Profit/Net Sales)*100

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Operating Profit Margin (%)

Year Operating Profit Sales Operating Profit Margin (%)

March '09 1,828.52 5979.46 30.58

March '08 1,160.83 3985.00 29.13

March '07 983.38 3442.00 28.57

March '06 700.13 3141.00 22.29

March '05 607.08 2742.00 22.14

Conclusion:

The operating profit ratio of 30.58% in March’09 indicates that average operating

margin of Rs.30.58 was earned on sale of Rs. 100. This amount of Rs.30.58 is

available for meeting non operating expenses. In the other words operating profit ratio

30.58% means that 30.58% of net sales remains as operating profit after meeting all

operating expenses.

The above operating profit ratios indicate that the company has great efficiency in

managing all its operations of production, purchase, inventory, selling and

distribution and also has control over the direct and indirect costs.

Net Profit Margin

Meaning:

Net Profit ratio indicates the relationship between the net profit & the sales and is

usually expressed in the form of a percentage.

Formula:

Net Profit Margin = (Net Profit/Net Sales)*100

Net Profit Margin (%)

Year Net Profit Net Sales Net Profit Margin (%)

March '09 870.01 5979.46 14.55

March '08 571.85 3985.00 14.35

March '07 399.62 3442.00 11.61

March '06 604.01 3141.00 19.23

March '05 192.49 2742.00 7.02

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Conclusion:

The net profit ratio of the company is comparatively low in all the 5 years however

the net profit is in increasing order except March’07 where it had been decreased.

Profitability ratio of company shows considerable increase which shows that

company has been successful in controlling the expenses i.e. manufacturing & other

expenses which is a clear index of cost control, managerial efficiency & sales

promotion.

LEVERAGE RATIO

It shows the relationship between proprietors funds & debts used in financing the assets of

the concern e.g. capital gearing ratios, debt equity ratios & Proprietory ratios.

Long Term Debt Equity Ratio

Meaning:

This ratio compares the long-term debts with shareholders fund. The relationship

between borrowed funds & owners capital is a popular measure of the long term

financial solvency of a firm. This relationship is shown by debt equity ratio.

Alternatively, this ratio indicates the relative proportion of debt & equity in financing

the assets of the firm.

Formula:

Debt Equity Ratio= Long Term Debt/Total Equity

Total Debt Equity Ratio

Year Long Term Debt Total Equity Total Debt-Equity Ratio

March '09 17186.85 9240.24 1.86

March '08 11401.71 5907.62 1.93

March '07 7391.75 3771.30 1.96

March '06 5574.99 3260.23 1.71

March '05 4051.28 1702.22 2.38

Conclusion:

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The debt equity ratio expresses the relation between the external equities & internal

equities. This ratio is very important from the point of view of creditors & owners.

The debt equity ratio has decreased from 2.38 in March’05 to 1.86 in March ’09

which shows that there is increase in debt as well as the shareholders fund. This

shows long-term capital structure. The lower ratio is viewed as favorable from long

term creditors’ point of view.

Proprietory Ratio

Meaning:

This is a variant of the debt to equity ratio. It is also known as the equity raio or net

worth to total assets ratio. This ratio relates the shareholder’s funds to total assets.

Proprietory ratio indicates the long term or future solvency position of the firm.

Formula:

Proprietory Ratio= Shareholders Fund/ Total Assets

Proprietory Ratio

Year Shareholders Fund Total Assets Proprietory Ratio

March '09 9240.24 17748.95 0.52

March '08 5907.62 12228.11 0.48

March '07 3771.30 8041.89 0.47

March '06 3260.23 5643.11 0.58

March '05 1702.22 4218.45 0.40

Conclusion:

The Proprietary ratio of the company is 52% in the March ’09 which means that for

every Re 1 of total assets, 52 paise has come from owners fund while the remaining

48 paise by the outside creditors. This shows that the contribution by outside to total

assets is less than the owners’ fund. As the Proprietary ratio is favorable, the

Company’s long-term solvency position is sound.

Capital Structure Ratio

Meaning:

The Capital Structure Ratio shows the percent of long term financing represented by

long term debt.

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Formula:

Capital Structure Ratio= Long Term Debt/ (Shareholders Equity+ Long Term Debt)

Capital Structure Ratio

Year Long Term Debt Shareholder's Equity + Long Term Debt Capital Structure Ratio

March

'0917186.85 23884.86 0.72

March

'0811401.71 15999.71 0.71

March

'077391.75 10264.7 0.72

March

'065574.99 8257.19 0.68

March

'054051.28 5286.03 0.77

Conclusion:

The Capital Structure Ratio shows the percent of long term financing represented by

long term debt. In March ’09 this ratio is 0.72 which means that 72% of the total

financing is long term financing. The company is maintaining this ratio very

efficiently.

ACTIVITY RATIO

It is an indicator of how rapidly a firm converts various accounts into cash or sales. In

general, the sooner management can convert assets into sales or cash, the more effectively

the firm is being run.

Inventory Turnover Ratio

Meaning:

ITR refers to the number of times the inventory is sold and replaced during the

accounting period.

Formula:

Inventory Turnover Ratio= Cost Of Goods Sold/Average Inventory

Inventory Turnover Ratio

Year Cost Of Goods Sold Average Inventory Inventory Turnover Ratio

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March'09 4423.87 570.82 7.75

March'08 2938.00 430.16 6.83

March'07 2659.00 694.26 3.83

March'06 2227.00 616.90 3.61

March'05 2280.00 267.92 8.51

Conclusion:

Stock turnover ratio shows the relationship between the sales & stock i.e. how stocks

are being turned into sales. The stock turnover ratio in March ‘05 was 8.51 times

which indicate that the stock is being turned into sales 8.51 times during the year. The

inventory cycle makes 8.51 rounds during the year. It helps to work out the stock

holding period; it means the stock turnover ratio is 8.51 times then the stock holding

period is 1.4 months [12/8.51=1.4months]. This indicates that it takes 1.4 months for

stock to be sold out after it is produced. For the last 5 years stock turnover ratio is

lower than the standard but it is in increasing order since March ‘06. From March ’06

to March ‘09 the stock turnover ratio has improved from 3.61 to 7.75 times, it means

with lower inventory the company has achieved greater sales. Thus, the stock of the

company is moving fast in the market.

Fixed Asset Turnover Ratio

Meaning:

This ratio measures the efficiency with which fixed assets are employed. A high ratio

indicates a high degree of efficiency in asset utilization while a low ratio reflects an

inefficient use of assets. However, this ratio should be used with caution because

when the fixed assets of a firm are old and substantially depreciated, the fixed assets

turnover ratio tends to be high (because the denominator of the ratio is very low).

Formula:

Inventory Turnover Ratio= Cost Of Goods Sold/Average Inventory

Fixed Asset Turnover Ratio

Year Net Sales Net Fixed Assets Fixed Asset Turnover Ratio

March '09 5979.46 8924.57 0.67

March '08 3985.00 5175.32 0.77

March '07 3442.00 4197.56 0.82

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March '06 3141.00 3271.88 0.96

March '05 2742.00 3046.67 0.90

Conclusion:

This ratio measures the efficiency with which fixed assets are employed. The Fixed

Asset Ratio in March ’05 was 0.90 which shows a high degree of efficiency in asset

utilization while in March ’09 the ratio falls to 0.67 which shows that the company is

not utilizing asset efficiently, meaning that there is under utilization of the assets

available with the company.

Inventory Conversion Period

Meaning:

The inventory conversion period indicates the no. of days the company holds

inventory.

Formula:

Inventory Conversion Period= (Inventory/COGS)*365

Inventory Conversion Period

Year Cost Of Goods Sold Inventory Inventory Conversion Period

March'09 4423.87 1228.62 101

March '08 2938.00 981.30 122

March'10 2659.00 806.16 111

March '09 2227.00 601.33 99

March'11 2280.00 599.67 96

Conclusion:

The company’s inventory conversion period is low in March ’09 as compared to

March ’08 which shows that company is using fewer funds in holding inventory

which is good for business.

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Comparison between Jaiprakash Associates Limited and Unitech

Financial Ratios Jaiprakash Associates Ltd. Unitech

Current Ratio 1.46 0.96

Quick Ratio 1.24 0.96

Cash Ratio 0.49 0.02

Gross Profit Margin (%) 25.22 56.16

Operating Profit Margin (%) 30.58 56.73

Net Profit Margin (%) 14.55 30.54

Long Term Debt/ Equity Ratio 1.86 2.36

Inventory Turnover Ratio 7.75 279.74

Jaiprakash Associates Limited looks like an easy winner in a liquidity contest. It has

an ample margin of current assets over current liabilities which are represented

through a seemingly good current ratio as compared to Unitech.

The Quick Ratio of Jaiprakash Associates limited is 1.24 while that of Unitech is

0.96 indicating that Jaiprakash Associates has sounder quick ratio as compared to

Unitech & its day-to-day solvency is also better than Unitech.

The Cash Ratio Of Jaiprakash Associates Limited is 0.49 while of Unitech is 0.02.

This means that Jaiprakash Associates has enough cash, bank balance as well as

marketable securities to meet any contingencies while that of Unitech don’t have

sufficient cash, bank balance and marketable securities to meet any contingencies as

compared to Jaiprakash Associates Limited.

The Gross Profit Margin Of Jaiprakash Associates Limited is 25.22% but in case of

Unitech it is much higher i.e. 56.16% indicating that Unitech has higher profit

remaining after manufacturing costs are met as compared to Jaiprakash Associates

Ltd.

The Operating Profit Margin Of Jaiprakash Associates Limited is 30.58% while of

Unitech is 56.73%. This means that Unitech has better sales realization and effective

cost control as compared to Jaiprakash Associates Ltd.

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The Net Profit Margin Of Jaiprakash Associates Limited is 14.55% while of Unitech

is 30.54%. This means that Unitech has better cost control, managerial efficiency &

sales promotion which help the company to expand at a rapid pace as compared to

Jaiprakash Associates Ltd.

The Long Term Debt/Equity Ratio Of Jaiprakash Associates Limited is 1.86 while

of Unitech is 2.36. This means that Jaiprakash Associates Ltd. has better ratio which

means that internal equities are more than external equities. The lower ratio viewed as

favorable from long term creditors’ point of view and Unitech has higher long term

debt/equity ratio so creditors’ will look Jaiprakash Associates Ltd. as more favorable

company.

The Inventory Turnover Ratio Of Jaiprakash Associates Limited is 7.75 while that

of Unitech is 279.74. Jaiprakash Associates has stock holding period of 1.5 months

(12/7.75) and Unitech has stock holding period of almost 0.04 months (12/279.74).

Hence, Unitech is using fewer funds in holding inventory as compared to Jaiprakash

Associates Ltd.

Cash Flow Analysis

A cash flow statement, along with the balance sheet and income statement are the three most

common financial statements used to gauge a company’s performance and overall health.

The same accounting data is used in preparing all three statements, but each takes a

company’s pulse in a different area.

The cash flow statement discloses how a company raised money and how it spent those funds

during a given period. It is also an analytical tool, measuring an enterprise’s ability to cover

its expenses in the near term. Generally speaking, if a company is consistently bringing in

more cash than it spends then that company is considered to be of good value.

A cash flow statement is divided into three parts: operations, investing and financing. The

following is an analysis of a real-world cash flow statement belonging to Jaypee Group. Note

that all figures represent in Crores.

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Cash from operations: This is cash that was generated over the year from the company’s

core business transactions. Note how the statement starts with net earnings and works

backward, adding in depreciation and subtracting out inventory and accounts receivable. In

simple terms, this is earnings before interest and taxes (EBIT) plus depreciation minus taxes.

Interpretation: This may serve as a better indicator than earnings, since noncash earnings

can’t be used to pay off bills.

Cash from investing: Some businesses will invest outside their core operations or acquire

new companies to expand their reach.

Interpretation: This portion of the cash flow statement accounts for cash used to make new

investments, as well as proceeds gained from previous investments. In Jaypee Group’s case,

this number in 2005 was -614.15, which shows the company spent significant cash investing

in projects while in 2009 this number changed to -3,712.66 which hope to lead in future

growth.

Cash from financing: This last section refers to the movement of cash from financing

activities. Two common financing activities are taking on a loan or issuing stock to new

investors. Dividends to current investors also fit in here. Jaypee Group reports a positive

number for 2005, 939.34 and for 2009 it had increased to 4,259.04.

Interpretation: Investors will like these last two items, since they reap the dividends, and it

signals that Jaypee Group is confident in its stock performance and wants to keep it for the

company’s gain. A simple formula for this section: cash from issuing stock minus dividends

paid, minus cash used to acquire stock. The final step in analyzing cash flow is to add the

cash balances from the reporting year and the previous year; in Jaypee Group’s case that’s

1069.50 plus 1839.09, which equals 2908.59 in March ‘09.

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Annual results in brief

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Sales 5,979.46 3,985.00 3,442.00 3,141.00 2,742.00

Operating profit 1,891.44 1,097.00 904.00 618.00 510.00

Interest 504.32 339.00 257.00 237.00 213.00

Gross profit 1,555.59 1,047.00 783.00 914.00 462.00

EPS (Rs) 6.40 5.21 3.79 6.59 2.35

Therefore from the above financial analysis it is clear that the company is growing stronger

year by year and is generating more and more over the period of time. It has also expanded

into various other sectors which have reflected in its revenues. It has also been able to bag

more offers which have resulted in the increase in the sales of the company.

Above we can notice that the Profit of the company has increased close to 4 times in the last

4 years which is the strongest indicator of how the company has been performing over the

period.

Bonus announcement

Year Month Ratio Ex Bonus Date

2009 Oct 1:2 17/12/2009

The company also announced bonus for its investors in the year March’09 which indicates

that the firm is trying to attract more & more customers & also it is creating a positive word

of mouth for the company.

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PROJECT INTRODUCTION

Delhi is now more or less saturated and the high demand for residential property has got the

property rates soaring, making investors wary of investing in the related Real-Estate deals in

the region. As a result, the suburban towns within the NCR; Gurgaon, Noida, Greater Noida,

Faridabad and Ghaziabad have become destinations for new residential projects that offer

affordable quality housing to the middle class as well as luxury housing for high end users.

As these suburbs are now increasingly generating employment, they will decide the future

growth pattern of the NCR.

The business and trader class still largely dominate old residential areas in west and

northwest Delhi. Similarly the large multi-storey societies in East Delhi – in Mayur Vihar

and Patparganj – have found preference with the service class. The blue-collar segment

remains limited to apartments and society developments while big and small traders occupy

the whole of west Delhi, including Rohini. The elite class, in terms of social status, i.e.

politicians, bureaucrats and celebrities, are generally residents of Central and south Delhi.

Suburban areas like Noida and Gurgaon have thus come up as alternative housing solutions

and are inhabited mostly by professional and service class people, as well as an increasing

upper middle class segment.

Noida has experienced rising prices in its existing commercial, retail and residential real

estate. The new developing residential sectors are along the Greater Noida expressway.

Occupancies in Noida are good and the Real-Estate prices are going north. It is a good

destination for the middle class, as far as accessibility, social and physical infrastructure and

growth perspective are concerned. With a large number of builders stepping up to the task, a

number of integrated townships and Housing complexes are being developed in the region.

The city has also seen a recent boost in the commercial activity in the region especially

alongside the Noida-Greater Noida expressway. A large number of firms have set up

corporate offices in the region generating huge employment opportunities and attracting the

service class population along with. A large number of reputed schools and colleges catering

to the needs of the student community especially in areas such as Knowledge Park at Greater

Noida are a major reason for the students being keen upon residing in the vicinity.

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Gurgaon offers a good quality of living with many high-end residential projects by private

developers. These new developments offer uninterrupted power supply, community and

health care centres along with facilities like a swimming pool, clubhouse and other services.

As per industry estimates, projects with approximately 5000 dwelling units have been

announced in Gurgaon. Since it will be maturing as an independent city, occupancies will

improve but in the present context, it is an oversupply situation.

Objectives of the Study

The study has been conducted keeping the following objectives in mind:

To determine the First-Pull factor responsible for people investing in Real-Estate.

To know the degree of importance of various factors which people consider while

purchasing a house.

To determine the investors’ investment preferences in various options available

across the sector.

To find out the investors’ Financing Method preferences for investments

concerning Real-Estate.

To find out the reasons for transition of people from Delhi to The National Capital

Region (NCR).

To find out the perception of people about the cities included in NCR namely

Gurgaon, Noida, Greater Noida, Faridabad and Ghaziabad.

Nature and Scope of Study

The project is based upon a study of the perception of the investors towards Real-Estate

investments in the cities of NCR. The study aims to determine the factors the investors take

into consideration before making any investment in the five cities Noida, Greater Noida,

Gurgaon, Faridabad and Ghaziabad. The study is a questionnaire based research involving

gathering of data from individual investors and interpretation of the same.

The study has the potential to open up new vistas for the infrastructure companies by

providing them with information regarding the investor mindset. The research shall reveal the

various factors that the investors perceive to be of utmost importance before going into

investing into Real-Estate project. Various factors which the developer may consider as

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redundant or of less consequence may hold much significance for the investors. The study

aims to maximize the avenues for the infrastructure development firms to concentrate upon

and leave a trail for further research in the area.

Research Methodology

The research is a systematic collection, recoding and analyzing of data about the problems

relating to the infrastructure and Real-Estate investments in the cities of NCR. It involves the

diagnosis of information needs and the selection of relevant inter-related variables about

which valid and reliable information is gathered, recorded and analyzed.

Data Sampling

Sample Size:

Noida Greater Noida Gurgaon Faridabad Ghaziabad Total

100 100 100 100 100 500

Sampling Method: Convenience Sampling

Data Collection: Primary and Secondary Data

Data Collection

After making the list of the needed information, source of data and the sampling plan the

next step is the collection of data. In this study of the data is collected from primary as well

as secondary data. The details of the source of the data are:

Primary & Secondary Data.

Primary Data:

Primary data has been collected with the help of :

Questionnaire, Survey and feedback form.

64 | P a g e

Through interviewing of consumer and dealer.

Secondary Data: 

Secondary data was collected with the help of :

From company brochures and displays.

From the company websites:

www.jaypeegreens.com

www.jalindia.com

www.jaypeeinfratech.com

Information from different officials.

From the magazines and newspapers.

Data Analysis Tools

For identification of the variables and other factors, the data is required to be analyzed

and it is necessary to identify the tools and instrument through which the analysis of data

is to be done and presented leading to the meaningful and good results. The analysis was

done by using PASW Statistics Package SPSS 18.00 and MS-Excel.

65 | P a g e

DATA ANALYSIS

The study has been conducted keeping in mind five specific objectives. The questionnaire has been designed so as to collect all the relevant data for the purpose of analysis.

First pull factor

Location:

From the survey, Location factor emerged as the leading motivator for the people to

purchase the property in Greater Noida. One of the major reasons for the same can be

attributed to a large scale Infrastructural development that has spurted up in the recent

years in the region. The region has a good connectivity with Delhi, Noida and the

upcoming Ghaziabad. A large number of reputed schools and colleges, Hospitals as

well as employment generating BPOs along with a wide spread MNC presence are

major contributors to the same. Also the various upcoming projects such as the

Yamuna Expressway act as incentives to the location advantage.

Affordability:

Affordability emerged as the second most important First pull factor in the survey

with a rating of 42.00%. The region has seen a sudden spurt in Real-Estate

development with a large number of reputed builders as well as dedicated firms

coming up to the task. These upcoming projects have products catering to virtually

the entire section of the investor population ranging from highly affordable Studio

66 | P a g e

Apartments to luxurious and elite Penthouses and Condominiums. However the

affordable section still plays a major role in real-estate investment in the region.

The value for Brand name Of the Developer stands at 6.00% and the value for

advertisement is as low as 4.00%.

The obtained results are definitive of the areas the company should concentrate more upon so

as to reach the people to a greater extent and thus promoting the interests of the firm as a

whole.

Factors determining the Choice of a Housing Complex

Descriptive Statistics

N Minimum Maximum Mean

Price Range 500 2.00 5.00 4.2760

Area Accessibility 500 2.00 5.00 3.9720

Future Connectivity 500 2.00 5.00 3.9120

Resale Value 500 2.00 5.00 3.4280

Amenities/Facilities 500 2.00 5.00 4.0120

Valid N 500

4.276

3.972

3.912

3.428

4.012

MeanValues

Price RangeAccessibility Of areaFuture ConnectivityResale ValueAmenities/Facilities

The above shown factors were rated upon a Likert-Based scale on a range of 1 to 5 with 1 being the least significant and 5 being the Very Highly Significant factor. The descriptive table and the corresponding Pie-Chart display the mean values of the responses obtained.

Price Range:

The factor was given a mean value of 4.32 by the respondents clearly indicating the importance of the same. Price range logically is a major factor for real-estate related

67 | P a g e

investments as the concerned investments are generally long-term and involve a considerable amount of capital.

Amenities/Facilities:

Presence of certain amenities and add-on facilities in the locality plays a major role in investors coming to the region. Facilities such as Social Clubs, Gymnasiums, Recreational centers, Shopping Complexes, Schools, Colleges and Sports facilities provide a definitive edge to the locality.

Accessibility of Area:

Connectivity of the locality to major roads, highways and other important means of public transport such as the Metro, Bus stops, Auto stand etc. is another key investor motivator. A well connected and easily accessible area is definitely a positive sign for investments coming in the region.

Future Connectivity:

Proposed connectivity projects underway or in planning such as a proposed Metro connectivity or an ongoing highway project play a vital role in influencing the investment motives of the investors.

Resale Value:

Resale value remains a point of contention for people who generally make purchases for purely investment purposes. People interested in making long-term investments and investments for purely residential purposes do not pay much heed to the resale value of the apartments or plots etc. However it is certainly a major influencer as Real-Estate investments are considered to provide promising returns to the investors at large.

The In-Locality factors

Descriptive Statistics

N Minimum Maximum Mean

Density Of Locality 500 1.00 5.00 3.6060

Quality Of Construction 500 3.00 5.00 4.1640

Maintenance & Safety/Security 500 2.00 5.00 4.4160

Product Specification 500 1.00 5.00 3.1340

Water & Power backup 500 3.00 5.00 4.5640

Car Parking 500 2.00 5.00 3.9360

Valid N 500

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Water & Power Backup:

In the NCR region a large number of high rise buildings lack continuous fresh water

availability. Also frequent load shedding by the government causes a large demand

for continuous power backup facilities. Developers offer these facilities to the

residents of localities. Although the residents are charged a higher price for the same,

the water and power backup availability still remains the major contributor to the In

Locality factors. The facility is also responsible for the recent upsurge in people

preferring to stay in integrated townships and developer localities instead of

Independent homes where such facilities are not readily available. The mean score

given to the factor was 4.564 signifying the level of importance to the same for the

investors to make Real-Estate investments.

Maintenance and Safety/Security:

Maintenance and Safety/Security was rated by the investors at a mean score of 4.416

making it the second most important factor considered by them after Water and

Power Backup facilities. It has been observed that in general people prefer to stay in a

gated and secure colony. The reason may be attributed to a considerable number of

nuclear families staying in the region as well as working individuals preferring a

certain measure of safety in the colony. Also the developers provide basic

69 | P a g e

maintenance facilities at reasonable charges allowing the residents to get hassle free

maintenance as and when required.

Quality of Construction:

A well planned, well constructed and properly executed locality, with an average

score of 4.164, is the third major factor considered by the investors while making

Real-Estate related investments. Most of the investments being made on a Long-Term

basis may be considered as a reason behind the same. The investors invest large sums

of money for their purchases and getting renovations done over is nothing but a

nuisance.

Car parking:

A properly planned parking space allotted to the residents, with an average score of

3.936, has been ranked the fourth major factor concerning Real-Estate investments. A

well designed parking lot for the residents helps avoid the on road congestion caused

due to uneven parking. Also this helps prevent the unwanted car thefts and avoids un-

necessary chaos on roads. The survey revealed that the residents do not object paying

a higher amount for a car parking lot availability.

Density of Locality:

The residents prefer residing in a reasonably well-occupied society but avoid

investing in highly populated regions. Also, localities which are scarcely populated

are not considered an ideal investment. Density of Locality factor was rated at an

average of 3.606 signifying moderate to High importance for the same. However the

fact remains that for an area with optimum population density, the residents have to

pay a larger amount which may sometimes hinder their investments in the locality.

Product Specification:

The investors while making an investment always have a certain specification in their

minds regarding the same. However the factor has been rated at an average of 3.134

specifying a moderate importance for the factor. This suggests that although the factor

is specific to the investors but the same may be partially compromised by them. A

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large availability of options in the market also goes a large extent in solving the

product specification related issues.

Factor Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .533

Bartlett's Test of Sphericity Approx. Chi-Square 610.833

df 55

Sig. .000

The Kaiser-Meyer-Olkin Measure of Sampling Adequacy is a statistic that indicates the

proportion of variance in your variables that might be caused by underlying factors. The

value of the factor being above 0.500 indicates that the underlying variables have a

correlation with each other and the factor analysis being undertaken can determine and

examine the underlying (or latent) relationships between the variables.

71 | P a g e

Component Matrix

Component

1 2 3 4

Price Range .204 -.095 -.233 .053

Area Accessibility .207 -.157 .400 .357

Future Connectivity -.256 -.280 .179 .246

Resale Value -.239 .462 .559 -.401

Amenities/Facilities .511 .098 .234 .235

Density Of Locality .891 -.176 .350 -.292

Quality Of Construction .116 .103 .223 .062

Maintenance & Safety/Security .038 -.220 .186 .425

Product Specification .460 .746 -.291 .339

Water & Power backup -.078 -.101 .013 .103

Car Parking -.521 .301 .355 .284

Extraction Method: Principal Component Analysis.

4 components extracted.

The Scree plot helps us to determine the optimal number of components. The Eigen value of

each component in the initial solution is plotted. The Component Matrix table depicted above

represents the variables with the highest correlation with the others. The table depicts 4

components exhibiting the highest values of correlation. The components have been shown

with having the highest values in the matrix under each component head. The higher the

value, the more significant a component becomes. From the matrix, the four components as

determined are:

Density Of Locality Product Specification Resale Value Maintenance & Safety/Security

The analysis clearly suggests that along with the general factors such as Price range,

Amenities/Facilities, Water and Power Backup and Area Accessibility, the above stated factors

bear a highly significant impact upon the mindsets of the investors.

72 | P a g e

Investment Preference

0102030405060708090

10077

9889

97 95

34

10

Investment Preference

Comments

The survey generated a mixed response from the respondents relating to their investment

preferences. The most preferred form of investment was Condominiums with a total of 98

respondents out of the total 500 preferring to invest here.

This was closely followed by the Rental property investments with a corresponding

respondent base of 97. This leads to Rental property being the second most preferred form of

investment in the Real-Estate sector.

Investment in Land related Real-Estate products turned out to be the next preferred form of

investment with 95 of the total respondents choosing to invest in Land. This establishes the

Land continues to attract the investors while considering Real-Estate investments.

Investments in Second homes turned out next with a net respondent base of 89 out of the

total. Investments in Commercial property followed lead with 77 respondents replying in

affirmative to the same. Commercial investments have long been considered one of the

leading spheres in Real-Estate related investments. The survey results however negate the

popular notion with Commercial investments.

Investments in Offices followed suit with 34 respondents. Investments in offices and office

complexes is generally a characteristic of MNCs and with the presence of the Multi Nationals

and domestic companies shooting up in the region, such investments are poised to grow in

the future.

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GREATER NOIDA

Preferred Method of Financing

Financing Frequencies

Responses

N Percent

Financing Preference New Loan(s) from a Financial Institution 76 35.2%

Seller Financing 66 30.6%

Assumption Of Existing Loans 36 16.7%

All Cash 10 4.6%

Trade Of Property 28 13.0%

Total 216 100.0%

Comments

The data collected form Greater Noida ranks ‘New loans from a financial institution’ as the

most preferred method for financing. The option generated a total of 76 affirmative

responses. The outcome is in conformity with the generalized market notion where most of

the Real-Estate related investments are generated by loans obtained from major lenders and

related financial institutions such as banks and other Non-Banking Financial Institutions.

The second most preferred method for generation of funds for investment in Real-Estate

came out of ‘Seller Financing’ option which was responded to with 66 affirmative responses.

Seller financing is emerging as a major contributor in Real-Estate investments due to its

comparatively hassle-free process as well as the in complete conformity with the

74 | P a g e

phenomenon of obtaining ‘Everything under one roof.’ Also a large number of developers in

the region make the option a lucrative think about due to attractive rates of interests in a

competitive market.

The third most preferred method of financing for the Real-Estate investors is the

‘Assumption of Existing loans’ which was checked upon by 36 responses. The investors in

the region have a tendency to generate finance through financial institutions with each

investor having certain credibility with their respective financers. The Investors who have

already sought a loan for some investment in the past may also have such a credibility which

makes them eligible for generating some additional amount from the financer subject to the

terms and conditions of their loan contract. This amount may then be further used to make

investments in the same or other sectors.

The fourth most preferred method of financing in the city is through ‘Trade of Property’ with

a total of 28 responses. Trade of property is another important factor that affects Real-Estate

investments due to the sector being a capital-intensive profit generating industry. Trade of

property implies an investor selling one holding property and using the funds generated

thereof to invest in another more lucrative deal in the investor’s perception.

Lastly ‘All Cash’ deals ranked fifth with a total of 10 responses definitely in agreement with

the trends of the industry. All cash deals are a less preferred financing method due to the fact

that such deals have a tendency of coming under scrutiny by the related Law-enforcement

authorities.

Reasons for Shifting

Responses

N Percent

Shifting Preferences Need For Better Location 44 15.1%

Need For More Space 48 16.5%

Need For Better Facilities 60 20.6%

Need For Healthy Environment 42 14.4%

Want For Quality Construction 34 11.7%

Water & Power Backup Facilities 45 15.5%

Recreational Facilities 18 6.2%

Total 291 100.0%

75 | P a g e

0102030405060 44 48

60

4234

45

18

Reasons For Shifting

Comments

For the respondents of Greater Noida, a ‘Need for better facilities’ emerged as the most

important reason for their preferring to shift to the region. The option invoked 60 responses.

Greater Noida is an upcoming location with a large number of developers gearing up for the

task. There is a great opportunity for development in the area due to abundance of land, its

optimal proximity along with several other projects of importance coming up. Also firms

such as Jaypee are coming up with large scale Integrated townships with extensive facilities

such as International standard golf courses, sports complexes, In-Locality schools, Colleges

and commercial areas. The investors are thus bound to get Better facilities with time.

A ‘Need for more Space’ was the second to front invoking a total of 48 responses. Instead of

the congested localities of areas such as Delhi, the people would prefer to move to Greater

Noida for more living space. The planned townships and developer complexes of the city are

being designed keeping the customer preferences regarding the same in mind.

One of the major reasons for people to shift from one location to another is a lack of ‘Water

& Power Backup’ facilities. The reason emerged as being the third in the study with a total of

45 responses to its credit. The recent upsurge in the trend for high rise buildings coupled with

deficient supplies causes acute water shortages in cities in areas of Delhi. Also a constant

shortage of electricity causes a lot of discomfort. The new integrated townships and

developer complexes thus emerge as a solution to the same promising constant 24-hr backup

facilities.

76 | P a g e

The ‘Need for a better Location’ emerged as the next most important factor with a total of 44

responses to the same. The region has seen an emergence of commercial activity with MNCs

like Samsung, LG, MoserBaer and ST Microelectronics setting up corporate offices here.

Also regions such as Knowledge Park offer definitive growth potential. With increased

employment opportunities, people would prefer staying closer to their work places. This

along with the above mentioned reasons can be attributed to the location related preference of

the region.

A ‘Need for Healthy Environment’ with 42 responses is the next preferred reason for shifting

to Greater Noida region. Most integrated townships in development have been directed to

keep 65-77 % of green area in the construction regions ensuring adequate pollution free

environment. Also international standard golf courses and stadiums are being planned and

constructed keeping in mind the concept of a green and healthy living conditions.

A ‘Want for Quality Construction’ is another major factor for people preferring to shift to

Greater Noida from other regions. The planned developments coming up in the region are in

keeping with this principle. Most developments are in keeping with the most recent trends in

construction strictly abiding with the specified norms for safety, security and other concerned

areas of interest.

Greater Noida is undergoing development at ever increasing paces and the scenario has led to

a large number of Recreational Centers coming up in the region. A ‘Need for Recreational

Facilities’ thus emerged as one of the most redundant factors in the study.

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NOIDA

Methods of Financing

Financing Frequencies

N Percent

Financing Preference New Loan(s) from a Financial Institution 76 37.6%

Seller Financing 56 27.7%

Assumption Of Existing Loans 30 14.9%

All Cash 10 5.0%

Trade Of Property 30 14.9%

Total 202 100.0%

020406080

7656

3010

30

Comments

For the investors of Noida, ‘New Loan(s) from a Financial Institution’ is the most preferred

method for generating finance for Real-Estate related investments. This indicates the fact that

the investors are wary of investing their personal funds into the deal and prefer to make the

investments on account of funds availed from a Financial Institution on terms and conditions

of the loan amount. The option generated 76 responses and tops the list.

‘Seller Financing’ emerged as the second most lucrative and sought after

investment generator with a total of 56 responses to its credit. The city

plays host to a large number of developers who cater to the financing

needs of the investors as well. A highly competitive market ensures the

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investors better deals when it comes to the Rates of interest being

offered.

For the region, finances generated from ‘Assumption of Existing Loans’ along with that

generated off ‘Trade of Property’ jointly share the next most preferred method of financing.

Each of these obtained 30 affirmatives from the respondents. With an assumption of existing

Loans the investors put their existing loan amount credibility to use and generate additional

finance from the financer they are already in contract with. Trade of Property remains an

important factor for consideration due to the sector being one which promises high returns on

investments leading the investors to generate finance by sale of redundant and obsolete

investments in lieu of better opportunities promising better rates of return.

‘All cash’ deals still remains at the bottom of the list due to the factors discussed in the

previous sections of the report under the analysis for the city of Greater Noida.

Reasons for Shifting

Shifting Frequencies

Responses

N Percent

Shifting Preferences Need For Better Location 35 12.3%

Need For More Space 46 16.2%

Need For Better Facilities 60 21.1%

Need For Healthy Environment 45 15.8%

Want For Quality Construction 36 12.7%

Water & Power Backup Facilities 24 8.5%

Recreational Facilities 38 13.4%

Total 284 100.0%

79 | P a g e

Comments

A ‘Need for better Facilities’ surfaced as the most common reason for people moving to the

city of Noida. The option was agreed upon with 60 responses leading it to top the list. With

major developmental work taking place in the region, the city offers a wide variety of

facilities catering to the entire population. The highways under construction, the numerous

schools as well as colleges along with reputed hospitals have come up in the region. The city

also has Metro connectivity providing the residents easy accessibility to Delhi and other areas

of Noida.

A ‘Need for More Space’ is the next most important reason for people to shift to the city. The

area is undergoing rapid development and offers a larger living space to the residents, which

is not a constraint to the developers in the region. The city has a plethora of undeveloped and

under-developed land leaving the investors to be able to invest into larger spaces with ease.

The city areas being developed under various flagships such as Jaypee promise to deliver

vast expanses of green land in the vicinity of homes for the investors and residents. The

reason makes ‘A Need for Healthy Environment’ the third most important factor in the list

with 45 responses to its credit.

‘Recreational Facilities’ ranks next in the study as the fourth most important factor causing

people to prefer Noida as their residence. The city has extensive recreational centers, theme

parks such as The Great India Place and Shopping complexes. The list being vast, people turn

towards Noida for the same reason.

80 | P a g e

A ‘Want for Quality Construction’ is another major factor for people preferring to shift to

Noida from other regions. The planned developments coming up in the region are in keeping

with this principle. Most developments are in according to the most recent trends in

construction strictly abiding with the specified norms for safety, security and other concerned

areas of interest. The architecture and planning are extensively well groomed and the

developing townships and the developers offer excellent construction achieving the required

quality standards.

A ‘Need for better location’ was the sixth factor in the study with 35 responses coming its

way. The city’s close proximity to Greater Noida and Faridabad along with Ghaziabad makes

it a lucrative option to be considered. The major areas in the city are well connected through

planned and well built highways and roads. The Metro project ensures an always available

and fast mode of transport for people commuting between Delhi and Noida.

A shortage of Electricity and Water is not as acute a problem for the residents of Noida as it

is at other places. The lack of large numbers of High rise buildings ensures constant water

supply in adequate fashion. The government ensures a constant and well maintained power

supply to the region due to it being a service and industry oriented state.

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GURGAON

Preferred Method of Financing

Financing frequencies

Responses

N Percent

Financing

Preference

New Loan(s) from a Financial Institution 80 34.9%

Seller Financing 68 29.7%

Assumption Of Existing Loans 40 17.5%

All Cash 9 3.9%

Trade Of Property 32 14.0%

Total 229 100.0%

020406080

8068

40

932

Methods Of Financing

Comments

In the analysis for the city of Gurgaon as well, for financing Real-Estate

deals ‘New Loan(s) from a Financial Institution’ was the most preferred

Method for financing used by the investor community. This again confirms

the theory that it is the Financial Institutions who are responsible for the

major chunk of funds flowing into the Real-Estate sector.

‘Seller financing’ emerged as the second most lucrative and sought after

investment generator with a total of 80 responses to its credit. The city of

82 | P a g e

Gurgaon hosts a large number of developers who cater to the financing

needs of the investors as well. A highly competitive market again ensures

the investors better deals when it comes to the Rates of interest being

offered.

An ‘Assumption of Existing Loans’ with 68 responses was yet again

another major source for finance. The Investors’ credibility allows them to

generate additional finance for further investments along with

comparatively hassle-free procedures.

The majorly preferred locations of the city are already being developed by

various developers and a ‘Trade of Property’ is another major source of

finance for the investor community. However, in locations such as

Gurgaon, it is a source of funds for people who own land in areas other

than the city. The people, as of now, are reluctant to hand over land easily

because of the high rate of return and the alluring prospects of increased

profits with time.

‘All Cash’ deals are as usual the bottom of the list due to reasons

discussed in the previous sections of the report.

Reasons for Shifting

Shifting Frequencies

Responses

N Percent

Shifting Preference Need For Better Location 46 15.4%

Need For More Space 46 15.4%

Need For Better Facilities 38 12.8%

Need For Healthy Environment 42 14.1%

Want For Quality Construction 40 13.4%

Water & Power Backup Facilities 46 15.4%

Recreational Facilities 40 13.4%

83 | P a g e

Total 298 100.0%

Need For Better L

ocation

Need For More Space

Need For Better F

acilities

Need For Health

y Envir

onment

Want F

or Quality

Constructi

on

Water &

Power Backu

p Facilities

Recreational F

acilities

05

101520253035404550 46 46

3842 40

46

40

Reasons For Shifting

Comments

For the respondents of Gurgaon, a ‘Need for better Location’, ‘Water and Power Backup’

along with a ‘Need for more space’ jointly emerged as the most important reasons for their

preferring to shift to the region. The options each invoked 46 responses. Gurgaon is location

which offers a great place to live in complete with adequate facilities in the region. A large

number of developers are gearing up for the task. There is a great opportunity for

development in the area due to abundance of land, its optimal proximity along with several

other projects of importance coming up.

A ‘Need for Healthy Environment’ was the second most important reason for people

preferring to shift to Gurgaon. A large number of developments offer a variety of facilities

such as spas, gymnasiums and the like. Although the city’s outskirts are not that adequate

with respect to the green area and parks etc. but the recently developed societies as well as

certain inbound areas offer a much healthier and greener environment.

A ‘Want for Quality Construction’ along with a ‘Need for Recreational Facilities’ emerged as

the next most important factors for people wishing to shift to the region. Each of these got 40

84 | P a g e

responses in the study. The city is equipped with a large number of recreational centers,

Shopping complexes and such other areas catering to the needs of the people. The

developments being undertaken in the region are in accordance with some of the most

developed architectural communities. However, the area still has a major potential for

improvement. The governmental authorities need to gear up to the task if the target is to be

achieved to the hilt.

A ‘Need for Better Facilities’ emerged at the bottom of the list in the study for the city of

Gurgaon. Keeping in accordance with proper developments going on, the city does not lack

the need for better facilities. Hospitals, Schools and the like are not hard to come by and the

proposed Metro connectivity only makes the prospects more interesting.

85 | P a g e

FARIDABAD

Preferred Method of Financing

Financing Frequencies

Responses

N Percent

Financing Preference New Loan(s) from a Financial Institution 84 34.7%

Seller Financing 36 14.9%

Assumption Of Existing Loans 48 19.8%

All Cash 12 5.0%

Trade Of Property 62 25.6%

Total 242 100.0%

0

20

40

60

8084

3648

12

62

The above analysis indicates that ‘New loans from a Financial Institution’ is the most

preferred method of generating finance with 84 responses to its credit.

Generation of Finance through ‘Trade of Property’ ranks second in the survey with 64

responses in its favor. A lot of investors from Faridabad are endowed with a lot of property in

remote areas which, however lacks in basic amenities so they prefer to sell them and use the

generated funds to acquire property in areas where the facilities are easily available.

86 | P a g e

Earlier there were very less options available for respondents to invest into the Real-Estate

sector. However, new arenas have now been unlocked and a much larger playing field is now

available. The investors who were previously under-investing can now use their complete

credit worth of loans for financing the related Real-Estate investments. Hence an

‘Assumption of Existing Loans’ ranks as the third most preferred method of financing a

Real-Estate deal.

The region has witnessed an upsurge in the real-estate projects with reputed firms

undertaking numerous projects in the area. In order to attract investors the developers are

offering as many options as are available with them. For instance providing loans for some of

the real-estate projects and financing the deals by themselves. Investors are gladly opting for

the same as owing to the tough market competition, they are bound to get better deals in the

process. This makes ‘Seller Financing’ the fourth on the chart.

The last on the list was the ‘All Cash’ deals with just 12 affirmative responses to it. The

reason behind the same is definitely the fact that shelling out such large amounts of cash in a

single installment is not a viable option for most of the investors.

Reasons for Shifting

Shifting Frequencies

Responses Percent of

CasesN Percent

Shifting

Reasons

Need For Better Location 40 12.8% 40.0%

Need For More Space 52 16.7% 52.0%

Need For Better Facilities 42 13.5% 42.0%

Need For Healthy Environment 36 11.5% 36.0%

Want For Quality Construction 48 15.4% 48.0%

Water & Power Backup Facilities 58 18.6% 58.0%

Recreational Facilities 36 11.5% 36.0%

Total 312 100.0% 312.0%

87 | P a g e

0102030405060

4052

4236

4858

36

Reasons For Shifting

One of the major reasons for people to shift from one location to another is a lack of ‘Water

& Power Backup’ facilities. The reason emerged as having the top-most priority in the study

with a total of 45 responses to its credit. The recent upsurge in the trend for high rise

buildings coupled with deficient supplies causes acute water shortages in cities in areas of

Delhi. Also a constant shortage of electricity causes a lot of discomfort. The new integrated

townships and developer complexes thus emerge as a solution to the same promising constant

24-hr backup facilities.

A ‘Need for More Space’ is the next most important reason for people to shift to the city. The

area is undergoing rapid development and offers a larger living space to the residents, which

is not a constraint to the developers in the region. The city has a plethora of undeveloped and

under-developed land leaving the investors to be able to invest into larger spaces with ease.

A ‘Want for Quality Construction’ emerged as the next most important factor with 48

responses to its credit. The same has been easily catered to by the developers coming up with

excellent investment options offering projects with the most developed architecture. Also the

free land plots the investors invest into for residential purposes are also developed by the

same keeping in mind the personal preferences ensuring a proper construct and quality as per

requirement.

The investors are always looking for ‘Better Facilities’ and the city is now quite appropriate

for the same. The various projects being undertaken by the government as well as the private

developers are evidently making progress and providing people with better facilities on the 88 | P a g e

go. Various market places are coming up especially in the sector regions and the roads and

highways are being developed. The government also provides incentives to the industry

located in the region leading to further the generation of revenues for the state.

The place is adequately located with respect to Noida, Greater Noida, Ghaziabad and most

important of all to Delhi. The Metro project coming up to the Badarpur region of the city is

working as an added incentive for people commuting to Delhi and beyond. The place also

sports the M.B road region wherein a large number of workplaces are located leading to the

region being an appropriate choice for putting up for the working class. However, it cannot

be ideally said that the area is done doing its share of the work. The city still needs to better

the facilities being provided in order to compete with other cities of NCR such as Noida and

Gurgaon. The reasons make ‘A Need for Better Location’ the fifth most preferred reason for

people to shift to the region.

The last two reasons on the list are’ A Need for Healthy Environment’ and ‘Recreational

Facilities’ with just a meager 36 responses to their credit. The responses obtained are not any

eye openers. The city definitely lacks presence of green areas and health centers. The

maximum that can be said regarding the Recreational Facilities in the region are the few

Shopping Complexes and multiplexes coming up. The region definitely needs to work upon

the issues in order to remain at par with the other competitors.

89 | P a g e

GHAZIABAD

Methods of Financing

Financing Frequencies

Responses

N Percent

Methods Of Financing New Loan(s) from a Financial Institution 70 32.4%

Seller Financing 78 36.1%

Assumption Of Existing Loans 30 13.9%

All Cash 6 2.8%

Trade Of Property 32 14.8%

Total 216 100.0%

020406080

70 78

366

32

Methods Of Financing

Methods Of Financing

Comments

The analysis for Ghaziabad ranks Seller Financing, with 78 affirmative responses, as the

most preferred method for investment financing in the Real-Estate sector in the region. This

outnumbers the responses generated for New Loans from a Financial Institution for

investments by a total of 8 responses with the later getting only 70 clicks from the

respondents. The results may be indicative of a slight paradigm shift in the sector as getting

finances from a Financial Institution is generally the most favored opinion amongst

respondents. Getting loans from a recognized financial Institution is considered as the safest

90 | P a g e

option by most of the investors as the process is fairly transparent and a highly competitive

market generates an edge for the seeker of the facility.

The next most preferred option for getting finances for investments turned out to be

Assumption of existing Loans generating 36 affirmative responses being closely followed by

financing from trade of property with 32 responses. This remains in confirmation with the

general notion pertaining to the sector. Financing from Trade of Property in the region

getting fewer responses may be attributed to the fact that the preferred locations in the region

are generally being undertaken by the builders for developmental purposes.

All cash deals generated 6 responses from the respondents, making it the least preferred

option for financing real-estate related investments, in the survey which is most conveniently

in confirmation with the predictable results.

Reasons for Shifting

Shift Frequencies

Responses Percent of

CasesN Percent

Shifting Preferences Need For Better Location 48 15.9% 48.0%

Need For More Space 58 19.3% 58.0%

Need For Better Facilities 48 15.9% 48.0%

Need For Healthy Environment 28 9.3% 28.0%

Want For Quality Construction 24 8.0% 24.0%

Water & Power Backup Facilities 63 20.9% 63.0%

Recreational Facilities 32 10.6% 32.0%

Total 301 100.0% 301.0%

91 | P a g e

010203040506070

4858

48

28 24

63

32

Water and Power Backup:

The option generated 63 responses from the respondents in the survey making it the most

relevant reason for the people to shift from the region. The city faces an acute shortage of

power and water in comparison with the nearing estates of the region i.e. Noida and Greater

Noida. The reasons may be manifold ranging from extremely over-populated communities to

lack of governmental policies pertaining to the same. Also a presence of high rise buildings

in certain localities such as the Indirapuram causes a shortage in water supply to the

apartments on higher floors.

Need for more space:

A need for more living space was quoted as the second most wanted option in the list with a

total of 58 responses pertaining to the same. The reason can be easily attributed to the

presence of highly crowded localities in the region. The major living areas if the city has a

relatively high population density housing more people than they were actually designed for

in the first place.

Need for better Location and better Facilities:

The corresponding options invoked an equal number of responses from the survey placing

them jointly at the third spot for the reasons attributing to the phenomenon of shifting from

the region. People always prefer to minimize the distance between their residence and their

92 | P a g e

area of employment so as to reduce the time to commute between the same. With major

employments coming up in Noida, Greater Noida and Faridabad as well as the bordering

areas, people are in a need for a location which suits their travelling needs as per the related

convenience.

Also the fact that the region lacks the basic facilities of Power and Water along with a

general unavailability of parking spaces is the reason for 48 responses that came in for a

Need for Better Facilities in the area.

Recreational Facilities:

The responses for the same were 32 ranking the reason at the fourth spot. The reason may be

attributed to the fact that although the area is not adequately equipped with recreational

facilities, the same are now beginning to come up in certain locales. The area is witnessing a

growth in development of Shopping Complexes, Multiplexes and the like.

Need for healthy environment:

The option has been ranked at the fifth spot by the respondents. However the region lacks the

adequate open space and green area. The response generated in the survey cannot be

adequately linked to the causes. The plausible reason for the same may be that the general

working class who responded to the survey does not show a keen interest in the development

of parks, stadiums and other such facilities in the region. However the awareness regarding

the same may come with time but as of now, the survey did not reflect a concern for the

cause.

Want for Quality construction:

The option was ranked the last in the survey with just 24 responses to its credit. The cause for

the same is that the region has now come under development with projects being undertaken

by specialized builders and constructers. This ensures the construction quality being

delivered to the individual inhabitants. Also the competitive market helps the residents to

avail the best possible deals with regards to their preference for quality construction and the

price they are ready to pay for the same.

93 | P a g e

INVESTOR PERCEPTIONLocation

Greater Noida Noida Gurgaon Faridabad Ghaziabad Others

First Preference 82 172 144 88 4 10

Second Preference 148 162 82 84 8 16

Third Preference 130 102 104 126 26 12

Fourth Preference 92 54 92 126 98 38

Fifth Preference 38 6 44 50 278 84

Sixth Preference 10 4 34 26 86 340

Comments

With respect to the Location factor, Noida tops the list of people surveyed with 172 out of the

total 500 respondents surveyed. This establishes the fact that a large percentage of people

prefer to invest in the city of Noida on the basis of the advantage of its location.

Noida is situated at optimal distances from places such as Greater Noida, an emerging

business hub, Faridabad and Ghaziabad. The city also has a Metro connectivity with Delhi

making it an ideal location for commuters to put up. Noida is undergoing major

developmental projects in the form of integrated townships such as Jaypee Greens along with

major highways and numerous schools and other educational institutions coming up in the 94 | P a g e

vicinity. The cost of living in the city acts as an added incentive as the same is not very high

as compared to Delhi and Gurgaon.

Gurgaon was the next most preferred location for the investors for investing in Real-Estate.

The city invoked 144 responses from the study. The factor is attributable to the major

projects and Real-Estate development going on in the region. The City offers a plethora of

facilities such as Recreational centers, Shopping complexes and the like. The region also has

a proposed metro connectivity coming up in near future making it a head-turning place for

the investors.

Greater Noida ranked fourth in the list just after Faridabad. The region is an upcoming one

with major developments taking place. The place is connected to Noida through the Noida-

Greater Noida expressway. The under development Yamuna Agra Expressway will lead the

city to connect well with the interiors of Uttar Pradesh.

Business HubGreater Noida Noida Gurgaon Faridabad Ghaziabad Others

First Preference 76 118 224 56 8 20

Second Preference 64 188 152 70 12 14

Third Preference 94 94 56 152 54 44

Fourth Preference 72 78 38 140 138 42

Fifth Preference 140 14 22 54 184 86

Sixth Preference 54 8 8 28 104 294

95 | P a g e

Comments

Gurgaon tops the list for the section Business Hub from the study. The city is host to a large

number of corporate offices and BPOs. The area is complete with large Shopping complexes,

Multiplexes and other Recreational centers. Gurgaon thrives on the service industry with

companies such as Ericsson, Tata Consultancy Services, Polaris, IBM and Microsoft to name

a few. The city consequently attracts a large population of the working class for residential as

well as investment purposes. Also the area is in close proximity with Industrial belts such as

Bhiwadi and Manesar with major automobile manufacturers such as Maruti Suzuki and Hero

Honda contributing majorly to the viability of the city.

With major developmental work taking place in the region, Noida offers a wide variety of

facilities catering to the entire population. The city has extensive recreational centers, theme

parks such as The Great India Place and Shopping complexes. The list being vast, people turn

towards Noida for the same reason. Development of major highways such as the Noida-

Greater Noida expressway has led to a large number of developers and infrastructure

companies to establish corporate offices in the city and alongside the highways. Noida plays

host to a large number of BPOs and IT Parks which generate huge business opportunities and

revenues for the government offering alongside a vast amount of job opportunities.

Greater Noida ranks third in the study with 76 respondents agreeing to the viability of the

city being a business hub. The city plays host to large number of Multi-National Company

offices along with areas such as the Knowledge Park catering to vast expanses of student

community. The area is complete with a large number of reputed institutes ranging from

Graduation colleges to reputed B-Schools. The upcoming Yamuna-Agra Expressway will

lead to connectivity with the interiors of the state of Uttar Pradesh leading to greatly

enhanced trade opportunities. The region is not confined to a single sector and caters to a

vastly varied need such as manufacturing, services and education leading it to be a location

with vast investment potential in future.

96 | P a g e

Quality of Living

Greater Noida Noida Gurgaon Faridabad Ghaziabad Others

First Preference 88 218 130 38 2 30

Second Preference 112 148 178 42 8 12

Third Preference 176 78 124 72 16 28

Fourth Preference 68 38 58 200 72 64

Fifth Preference 26 10 6 102 310 46

Sixth Preference 30 8 4 46 92 320

Comments

Noida was the foremost preference for the respondents under the category of ‘Quality of

Living’ with 218 respondents agreeing to it. With major developmental work taking place in

the region, the city offers a wide variety of facilities catering to the entire population. The

highways under construction, the numerous schools as well as colleges along with reputed

hospitals have come up in the region. The city also has Metro connectivity providing the

residents easy accessibility to Delhi and other areas of Noida. One of the key features of the

city is the presence of Residents’ Welfare Associations in societies in the city. These

associations undertake large amounts on in-society developmental work such as development

of parks, in-society roads, lighting etc. leading to an overall development of the same. The

city has extensive recreational centers, theme parks such as The Great India Place and

97 | P a g e

Shopping complexes. The government ensures a constant and well maintained power supply

to the region due to it being a service and industry oriented state.

Gurgaon ranks second in the list with 130 respondents. Gurgaon is majorly a services

oriented city and major developmental projects are being undertaken in the region. However,

the city is majorly developed across certain belts such as the alongside the Delhi-Jaipur

highway and areas surrounding M.G. Road. The quality of living is not upto the mark in the

interiors of the city. The city interiors are undergoing development leading to improvement

in the situation.

Greater Noida has been a planned development from the very initial phase of development.

The firms are being offered various incentives for taking up projects in the region by the

government. The government has well laid-out rules pertaining to the sectored development

of the region specifying proper norms for the builders and infrastructure firms to follow.

Law & Order

Greater Noida Noida Gurgaon Faridabad Ghaziabad Others

First Preference 56 132 156 118 14 30

Second Preference 36 166 122 122 6 48

Third Preference 32 158 146 106 24 32

Fourth Preference 136 30 44 46 164 80

Fifth Preference 172 14 20 64 174 56

Sixth Preference 68 0 12 44 118 254

Greater

NoidaNoida

Gurgaon

Farid

abad

Ghaziab

ad

Others0

50

100

150

200

250

300

56

132156

118

1430

First PreferenceSecond PreferenceThird PreferenceFourth PreferenceFifth PreferenceSixth Preference

98 | P a g e

Comments

Under the section of Law & Order, Gurgaon outranks all the other cities of NCR. The city

has well placed and organized Law enforcement as compared to Noida, Faridabad, Greater

Noida and Ghaziabad. The results are indicative of the fact that the residents feel more secure

and safe in Gurgaon as compared to the others. The factor is a major cause for attracting

people looking for residential property in the city.

Noida is the next preferred location for investors with concerns of safety and security and

Law and Order. The city being a part of Uttar Pradesh contributes to it being ranked lower

than Gurgaon, the crime rate being considerably higher in the state than in Haryana.

Faridabad was the third option with regards for Law and Order in the city. The city has

however now witnessed a change in scenario with the authorities gearing up for the task.

Vigilance has been stepped up a notch in the region in recent years.

Greater Noida ranks fourth in the list with just 56 respondents responding to it. The reason

may be attributed to the fact that the region is closer to the state interiors as compared to

Noida leading to deficient Law and Order situation.

Infrastructure

Greater Noida Noida Gurgaon Faridabad Ghaziabad Others

First Preference 122 98 200 45 25 10

Second Preference 98 210 86 70 30 6

Third Preference 124 88 46 90 80 72

Fourth Preference 78 33 48 195 97 49

Fifth Preference 44 35 66 65 222 68

Sixth Preference 34 36 54 35 46 295

99 | P a g e

Greater

NoidaNoida

Gurgaon

Farid

abad

Ghaziab

ad

Others0

50

100

150

200

250

300

12298

200

4525 10

First PreferenceSecond PreferenceThird PreferenceFourth PreferenceFifth PreferenceSixth Preference

Comments

The results from the study dictate that Gurgaon tops the list amongst the cities of NCR with

respect for Infrastructure. The city has undergone massive development in the last decade

and various projects as well as industrial undertakings catering to all the sections of the

society have contributed tremendously to its growth.

The next in the list is Greater Noida with 122 responses to its credit. The city has a highly

planned infrastructural wing which has seen a widespread development during the previous

years. The various projects being undertaken in the city including the Highways and the

developing areas of Knowledge Park along with the industrial undertakings in the region

have had a great impact on the investors regarding the Real-Estate in the city. The city

however is not fully developed and has developmental land ready for use in large quantities

offering a wide scope for further improvement. The various townships and integrated projects

coming up in the region plan to provide amenities and facilities of the highest order to the

residents along with offering exceptional rates of return to the investors. This has led to a lot

of Real-Estate investment in the region.

100 | P a g e

RECOMMENDATIONS

On the basis of the study, ad performance and achievements made by the responsibilities

assigned to me during my summer training tenure, I recommended the higher authorities the

following for their kind consideration:

The company should concentrate more upon the factors which were indicated by the

factor analysis along with the regularly considerable factors. The Density of Locality

is an important factor taken into consideration by the investors looking for residential

estate. This is followed by Maintenance & Safety/Security, Product Specification and

Resale Value which is of utmost importance to investors looking for a return on

investment.

Jaypee’s major projects are concentrated in Noida and Greater Noida only. The study

shows that the cities lacks in basic Law and Order leading to cause a lack of interest

in the Investors about purchase of Residential property in the region. The firm can

concentrate upon taking care of the security and safety concerns by providing the

investors with gated communities accompanied with proper surveillance.

The Jaypee Group lacks in at the commercial property front which is one of the major

source of revenues for its competitors in the Real-Estate segment.

The firm can concentrate more upon providing Seller Financing to the investors

looking for financial institutions. Seller financing emerged as the second most

preferred option for generating finance for Real-Estate related investments just after

Loan(s) form a Financial Institution.

101 | P a g e

CONCLUSION

From the study, the following conclusions were observed:

Noida is one of the prime locations to invest in real-estate while considering the

location factor being well connected to other cities of NCR as well as Delhi through

public transport and is closely followed by Gurgaon.

Considering the cities as a business hub, Gurgaon tops the list as it caters to each &

every section of the society ranging from the working class to the service class, it

being a hub for both the service as well as the manufacturing sector industries.

Greater Noida seems to the upcoming region for the same reasons.

While considering the quality of living, Noida stood out as the most preferred option

as here each and every part of the region is well maintained & the local residents

living in the region take the responsibility themselves. Greater Noida follows

Gurgaon by a short leap, which has came up as the second option after Noida.

Considering the law & order facility, Gurgaon tops the list. It caters & manages a

huge population which is a tough task but the handling for the same has been

exceptional leading to an excellent law and order situation in the city. The work

carried on by the law enforcement agencies in the region is thus commendable.

Greater Noida is far behind as being a developing city here the population density is

low & accordingly the enforcement agencies are not up to the mark.

In the infrastructure section, here Gurgaon is the top most priority. The

infrastructural development has been on full swing during the last decade and the city

is coming up with various new projects on its outskirts leading it to take the cap.

Closely follows is the city of Greater Noida as the region is still in the initial phase of

its development & there are ample of opportunities available within the city. It is

coming up a lot of projects which will help the city to compete with other developed

cities of NCR.

A few additional conclusions that were obtained after the study have been summarized

below:

102 | P a g e

The Location is the most important First-Pull factor that affects the investors

while going for a Real-Estate related investment.

The most adequate factor that determined an investor’s initiative towards a

housing complex was the Price range. The next most closely following factor was

determined as being the Amenities/Facilities provided by the developer within the

premises.

The In-Locality factor that affects the consumers the most is the Water and Power

Backup facility due to there being an acute problem for the same in the cities of

NCR. The factor to follow was the Maintenance and Safety/Security of the place.

The most preferred investments are those in Condominiums, Rental property and

Land. These were preferred by the investors in almost equal measures.

103 | P a g e

KEY LEARNINGS

Business and competitive environment in which the organization is operating.

The major factors the investors consider while investing in real-estate projects in the

cities of NCR.

Investors’ preference towards various cities of NCR.

104 | P a g e

ANNEXURE

JAIPRAKASH ASSOCIATES LIMITED

Balance Sheet

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Sources of funds

Owner's fund

Equity share capital 236.76 234.30 219.24 215.06 176.22

Share application money 202.40 398.50 - - -

Preference share capital - - - - -

Reserves & surplus 5,951.54 3,657.07 2,344.85 1,930.67 1,049.02

Loan funds

Secured loans 7,338.28 4,640.30 3,685.95 2,721.38 2,539.52

Unsecured loans 5,675.53 3,593.98 1,745.11 1,425.13 609.95

Total 19,404.51 12,524.15 7,995.15 6,292.24 4,374.71

Uses of funds

Fixed assets

Gross block 8,619.22 5,166.24 4,201.93 3,663.76 3,111.72

Less : revaluation reserve 307.31 308.13 308.86 536.47 9.51

Less : accumulated depreciation 1,801.31 1,454.73 1,279.97 1,196.09 1,059.54

Net block 6,510.60 3,403.38 2,613.10 1,931.20 2,042.67

Capital work-in-progress 5,763.37 4,545.18 2,228.13 876.06 396.37

Investments 4,465.20 3,224.83 1,778.74 1,557.04 1,191.98

Net current assets

Current assets, loans & advances 8,510.58 5,648.25 4,266.84 4,226.81 2,511.13

Less : current liabilities & provisions 5,849.10 4,297.59 2,891.80 2,299.38 1,769.90

Total net current assets 2,661.48 1,350.66 1,375.04 1,927.43 741.23

Miscellaneous expenses not written 3.86 0.10 0.14 0.51 2.46

Total 19,404.51 12,524.15 7,995.15 6,292.24 4,374.71

Notes:

Book value of unquoted investments 3,888.41 2,602.85 1,239.25 1,031.14 1,024.90

Market value of quoted investments 910.24 2,283.78 1,127.31 1,271.33 165.27

Contingent liabilities 3,727.47 3,900.16 2,785.73 2,549.71 5,868.77

105 | P a g e

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Number of equity shares outstanding (Lacs) 11838.01 11715.22 2192.40 2150.58 1762.17

Profit & Loss A/c

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Income

Operating income 5,768.76 3,978.37 3,468.16 3,164.41 2,814.52

Expenses

Material consumed 1,002.20 792.63 764.48 693.93 561.29

Manufacturing expenses  1,976.53 1,136.70 969.84 1,183.08 1,109.23

Personnel expenses 330.79 255.27 161.08 124.39 100.27

Selling expenses 416.41 368.86 345.05 271.60 251.40

Administrative expenses 278.44 265.85 236.85 185.93 169.04

Expenses capitalized - - - - -

Cost of sales 4,004.37 2,819.31 2,477.30 2,458.93 2,191.23

Operating profit 1,764.39 1,159.06 990.86 705.48 623.29

Other recurring income 395.53 268.32 105.22 163.09 140.02

Adjusted PBDIT 2,159.92 1,427.38 1,096.08 868.57 763.31

Financial expenses 584.75 383.70 297.96 297.52 298.03

Depreciation  308.97 203.30 163.05 151.46 133.34

Other write offs 0.33 0.31 0.31 0.61 0.30

Adjusted PBT 1,265.87 840.07 634.76 418.98 331.64

Tax charges  353.97 233.68 205.01 124.57 121.12

Adjusted PAT 911.90 606.39 429.75 294.41 210.52

Nonrecurring items -6.41 3.28 -14.85 345.58 -2.89

Other non cash adjustments 12.23 -0.06 - -0.16 -0.07

Reported net profit 917.72 609.61 414.90 639.83 207.56

Earnings before appropriation 2,501.36 1,719.67 1,315.28 1,025.50 447.82

Equity dividend 127.09 114.60 78.82 58.04 42.30

Preference dividend - - - - -

Dividend tax 15.57 19.47 12.09 8.14 5.93

Retained earnings 2,358.70 1,585.60 1,224.37 959.32 399.59

106 | P a g e

Cash flow  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Profit before tax 1,250.98 843.35 619.91 764.56 328.75

Net cash flow-operating activity 523.12 1,007.69 808.05 295.70 179.21

Net cash used in investing activity -3,712.66 -4,225.27 -2,108.39 -238.12 -614.15

Net cash used in fin. activity 4,259.04 3,603.21 1,060.35 879.75 939.34

Net inc/dec in cash and equivalent 1,069.50 385.63 -239.99 937.33 504.40

Cash and equivalent begin of year 1,839.09 1,429.81 1,669.80 732.47 222.83

Cash and equivalent end of year 2,908.59 1,815.44 1,429.81 1,669.80 727.23

UNITECH

Balance sheet  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Sources of funds

Owner's fund

Equity share capital 324.68 324.68 162.34 12.49 12.49

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 2,534.89 1,819.14 998.66 212.05 161.42

Loan funds

Secured loans 5,931.02 5,506.45 2,839.67 632.57 280.19

Unsecured loans 1,747.98 2,611.08 765.39 54.20 43.63

Total 10,538.56 10,261.35 4,766.06 911.30 497.73

Uses of funds

Fixed assets

Gross block 148.63 132.05 99.87 83.17 50.86

Less : revaluation reserve - - - - -

Less : accumulated depreciation 40.79 35.96 30.24 28.44 25.51

Net block 107.84 96.08 69.63 54.73 25.34

107 | P a g e

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Capital work-in-progress 8,688.46 7,083.41 4,408.59 1,824.66 1,106.14

Investments 1,954.94 1,397.99 518.93 282.39 166.57

Net current assets

Current assets, loans & advances 6,396.36 8,749.17 4,017.01 1,136.40 592.10

Less : current liabilities & provisions 6,609.04 7,065.30 4,248.10 2,386.87 1,392.42

Total net current assets -212.67 1,683.87 -231.08 -1,250.48 -800.32

Miscellaneous expenses not written - - - - -

Total 10,538.56 10,261.35 4,766.06 911.30 497.73

Notes:

Book value of unquoted investments 1,953.41 1,396.47 301.22 174.95 159.44

Market value of quoted investments 0.01 0.02 0.02 0.01 0.01

Contingent liabilities 4,227.29 2,325.69 1,640.51 434.87 376.88

Number of equity sharesoutstanding (Lacs) 16233.75 16233.75 8116.88 124.88 124.88

Profit loss account  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Income

Operating income 1,767.24 2,486.79 2,441.74 653.13 509.33

Expenses

Material consumed 23.87 45.57 78.97 61.07 55.68

Manufacturing expenses  568.06 981.25 853.98 396.10 359.62

Personnel expenses 106.44 98.43 65.62 31.11 15.95

Selling expenses 16.41 11.90 13.13 10.62 8.35

Adminstrative expenses 49.83 64.51 42.35 27.40 20.15

Expenses capitalised - - - - -

Cost of sales 764.62 1,201.68 1,054.04 526.29 459.75

Operating profit 1,002.61 1,285.11 1,387.69 126.84 49.57

Other recurring income 654.56 128.40 65.66 21.45 17.41

Adjusted PBDIT 1,657.17 1,413.51 1,453.35 148.29 66.98

Financial expenses 722.12 393.38 193.71 37.14 21.92

Depreciation  10.04 8.58 4.54 3.10 2.14

108 | P a g e

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Other write offs - - - - -

Adjusted PBT 925.01 1,011.55 1,255.11 108.05 42.92

Tax charges  216.98 334.83 361.27 38.48 13.46

Adjusted PAT 708.03 676.72 893.84 69.57 29.47

Non recurring items 31.63 353.96 89.72 0.07 0.45

Other non cash adjustments - -0.38 0.44 -0.51 -1.05

Reported net profit 739.66 1,030.30 984.00 69.14 28.86

Earnigs before appropriation 2,133.69 1,464.51 1,119.29 158.56 91.32

Equity dividend 20.44 40.58 40.58 16.23 5.00

Preference dividend - - - - -

Dividend tax 3.47 6.90 6.90 2.28 0.65

Retained earnings 2,109.77 1,417.03 1,071.81 140.05 85.67

Cash flow  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Profit before tax 956.64 1,365.51 1,344.83 108.13 43.37

Net cashflow-operating activity 826.31 -3,686.44 -1,755.68 -260.46 87.66

Net cash used in investing activity -42.41 -771.21 -117.32 -121.05 -93.24

Netcash used in fin. activity -1,051.93 4,033.01 2,508.19 347.25 116.50

Net inc/dec in cash and equivlnt -268.03 -424.64 635.19 -34.26 110.92

Cash and equivalnt begin of year 371.18 795.82 160.63 194.89 83.96

Cash and equivalnt end of year 103.15 371.18 795.82 160.63 194.89

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Name ___________________

House Hold income Below 3 Lac 3-6 Lac 6-10 Lac Above 10 Lac(Per Annum)

Residential Property Self Owned Rental

If Rental, Have you investedin some other Property Yes No

Duration Of Stay ____________ Size Of the Family ___________

1. What factor was the first pull to choose a particular housing complex?

Brand Name of the Developer Location Affordability Advisements

2. To what extent do the following factors influence your choice of a housing complex?LEGEND

Price Range 1- No Significance 1 2 3 4 5

Accessibility 2- SignificantOf area 1 2 3 4 5

Future 3- Moderately SignificantConnectivity 1 2 3 4 5

Resale 4-Highly SignificantValue 1 2 3 4 5

Amenities/ 5- Very Highly Significant

Facilities 1 2 3 4 53. To what extent do the following “In locality” factors influence your choice of a housing complex?

Density Of Locality 1 2 3 4 5

QualityOf Construction 1 2 3 4 5

Maintenance &

Safety/Security 1 2 3 4 5

Product

Specification 1 2 3 4 5

Water & Power

Availability 1 2 3 4 5

Car

Parking 1 2 3 4 5

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4. Your previous residence was a (Please Mention if Rental: Yes No)

Developer Housing Complex Independent House Society FLATS Others(Jaypee, Unitech etc.) (DDA, GDA etc.)

5. Specify the particular residence mentioned above____________________________________6. What types of real estate are you interested in purchasing?

Commercial Condominium Rental Second Home Land Office Other

7. Your preferred method of Financing would be: (check all that apply)

New loan(s) from a Financial Institution Seller Financing

Assumption of Existing Loan(s) All Cash Trade of Property 8. If you were to shift from your current residence, what could be the possible reasons?

Need for Better location Need for more space Need for better facilities

Need for healthy environment Want for quality construction Water & Power Back-up facilities

Recreational facilities Others __________________9. Out of the following, which city would you prefer to shift to?

Gurgaon Noida Greater Noida Faridabad Ghaziabad Others

10. Rank the cities on the following parameters: ( 1-Most Preferred 6-Least Preferred )

Gurgaon Noida Greater Noida Faridabad Ghaziabad Others

Location

Business Hub

Quality of Living

Law & Order

Infrastructure

11. Comments if any:_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

DECLARATION

This information is strictly for the purposes of academic research only. The information contained herein or any part thereof shall be kept confidential and none of it shall be disclosed to any other party, through any means whatsoever.

Place ____________________ Housing Complex __________________________

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Developer ____________________ Type of Flat __________________________

REFERENCES

BOOKS:

Financial Management- Theory & Practice by Prasana Chandra, Tata McGRAW

HILL.

Essentials of Marketing Research By Paurav Shukla

Forecasting and Market Analysis Techniques: A Practical Approach by George J.

Kress, John Snyder.

ANNUAL REPORTS OF JAIPRAKASH ASSOCIATES LIMITED

ANNUAL REPORTS OF UNITECH

WEBSITES

www.rbi.org

www.mospi.nic.in

www.marketresearchworld.net

http://marketing.about.com

www.moneycontrol.com

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