Mumbai: The Wadhawan family divided businesses and business interests between members in mid-2009, but could now witness some of the friction it wished to avoid with brothers Kapil and Dheeraj Wadhawan launching a realty business that will compete with cousin Sarang Wadhawan’s Housing Development and Infrastructure Ltd, or HDIL.
As part of the 2009 restructuring, Sarang Wadhawan and his father Rakesh Kumar Wadhawan took complete charge of HDIL, India’s third largest real estate company by revenue, while Kapil and Dheeraj Wadhawan took over the management of Dewan Housing Finance Ltd (DHFL), Wadhawan Retail Pvt. Ltd, Wadhawan Global Resorts and Hotels Pvt. Ltd and Wadhawan Lifestyle Retail Pvt. Ltd.
The brothers floated RKW Developers Pvt. Ltd, named after their father Rajesh Kumar Wadhawan, some five months back, but haven’t officially launched it yet. The company already has six premium residential projects in prime locations in Mumbai such as the Bandra-Kurla Complex business district, Juhu and Chembur.
“Initially, we thought we will stay away from real estate to avoid conflict of interest but it was difficult to resist,” Kapil Wadhawan, chairman and managing director of DHFL, told Mint. His younger brother Dheeraj Wadhawan, who has developed real estate projects in Dubai in the past, will head the new business.
Head to head: DHFL chairman and managing director Kapil Wadhawan (left) and HDIL managing director Sarang Wadhawan. The former’s company, RKW Developers, already has six premium residential projects in prime locations in Mumbai.
Sarang Wadhawan, managing director of HDIL, couldn’t be reached for comment over phone and didn’t respond to an email.
Kapil Wadhawan didn’t disclose the size of the land bank the new business owns; or if there had been any distribution of land between the two factions at the time of the restructuring. He only said the company has a substantial land bank in Mumbai.
It is likely that RKW will go head to head with HDIL.
Real estate analysts say though HDIL made its name in slum redevelopment projects, it has shifted its focus to mainstream residential and commercial projects after the downturn.
HDIL has a number of projects in suburban Mumbai across residential, commercial and industrial sectors, besides the 276-acre slum redevelopment project by the Mumbai international airport that will generate 44 million sq. ft. of land and transfer of development rights and further construction rights of 10 million sq. ft.
The size of a company’s land bank is the key in a city such as Mumbai to assess the scale to which Kapil Wadhawan’s real estate venture can expand, say analysts.
“Mumbai is a localized market and if the two companies have land close to each other, then there is scope for competition,” said Bhaskar Chakraborty, an analyst with brokerage India Infoline Ltd.
Chakraborty likened the development in the Wadhawan family to the Rahejas, a Mumbai-based business family whose members discovered their strengths after going their separate ways and built individual empires in real estate.
RKW Developers is marketing its projects under the “Dheeraj Realty” brand, under which all of Wadhawan family’s real estate activities were conducted before HDIL formed an independent entity some years ago.
RKW wants to eventually expand to projects in the low- and mid-income housing segment.
“Of course, we will then float the low-cost venture as a different brand,” said Kapil Wadhawan.