New Delhi: Delhi-based DCM Shriram Consolidated Ltd, a Rs2,500-crore-in-revenue company that makes fertilizers and chemicals, plans to develop four million sq. ft of commercial and residential space on land at its disposal in an effort to unlock the value of its assets and tap into rising demand for space and soaring real-estate prices.
Indonesia’s petrochemical conglomerate Indorama will hold a 50% stake in the project, according to Ajay Shriram, chairman and senior managing director, DCM Shriram.
Of this, three million sq. ft would be developed as residential townships and one million sq. ft into commercial properties, including malls, and IT and industrial parks, according to Shriram.
He added that although the company had been approached by several real-estate developers who wanted to buy the land, it had decided to develop the properties itself in association with Indorama, which has some experience in the construction business.
After the company relocated its textile mill from West Delhi to Tonk in Rajasthan in the mid-1990s following an order by the Supreme Court that said that factories had to be moved out of New Delhi, it was left with around 37 acres of land (it gave the rest to the government to develop a green belt).
It now plans to develop four million sq. ft on this land in accordance with prevailing laws, and has applied to the Delhi government for permission.
“I think it will take 10 to 12 months to get clearance from the government. We do not know exactly about the time since these things go through such a long procedure,” said Vikram Shriram, vice-chairman and managing director, DCM Shriram.
Once it receives permission, DCM Shriram and Indorama could still decide to bring in a real-estate developer as a partner, said Vikram Shriram. “I think we will be able to get a better deal from our prospective partners if we wait till we get clearance,” he added.
Apart from the land in Delhi, DCM Shriram has a land bank of 175 acres in five places across the country.
The company has 54 acres of land in Tamil Nadu, 65 acres in Puducherry, 51 acres in Rajasthan and two acres in Gurgaon. “We are looking at developing the land in Pondicherry into a hotel. As for the others, we have not decided yet,” said Ajay Shriram.