Mumbai: Realtor Orbit Corp is planning to launch three new housing projects in FY12 and expects to fund these from internal accruals, a top official said on Wednesday.
“We want to launch three new projects this year and in terms of square feet this would be around 750,000. These would be in this financial year and in the residential sector,” managing director and chief executive officer Pujit Aggarwal told Reuters in an interview.
The projects would be funded through internal accruals, he said.
The company, which has a net debt of Rs810 crore as on 31 March, expects it to remain at the same levels through FY12, he said.
“We are not going in for further (land) acquisitions, we are only maturing the existing pipeline. So it may not come down, but would remain at the same levels.”
Earlier in the day, the company reported a 7.94% fall in Jan-March net to Rs178.37 million.
“One is of course the slowdown in the industry, which did play its part,” Aggarwal said, adding permissions for various projects were delayed as the government was reviewing policies in the real estate sector.
“In few of the projects where we achieved sales, we were not able to recognise it, because permission had not come in and we were not able to reach 25% threshold limit,” he said.
Orbit Corp takes revenues into account only after 25% of a total building gets into its books.
There would be a price moderation in FY12 in Central Mumbai and the peripheral suburbs of Mumbai - such as Thane, Dahisar, Ambarnath, Kalyan and Dombivli - by 5-20% depending on levels of supply, Aggarwal said.
Weighed down by a piling up inventory as customers stay away, property prices in India’s key markets are slated to decline and a divergent trend is likely in other cities.
“I expect supply to come in now,” as the government is clearing regulatory hurdles “to enable housing at affordable levels for that community or locality.”
“I believe Q1 will remain flattish, Q2 we would see good movements, sentiment improving, everything falling into place.”
Orbit Corp, which fixes its property prices in line with the market, has no plans to raise prices in FY12.
“We want sales to take place and it is unlikely we will raise prices” in FY12, Aggarwal said.
The Reserve Bank of India (RBI) this month raised its key interest rates by a larger-than-expected 50 basis points to battle stubbornly high inflation, its ninth rate increase since March 2010.
Rising interest rates would likley impact the property industry that has had a harder time attracting bank financing following a spate of scandals over the past year and worries about business practices in the thinly regulated sector.
Orbit Corp plans to focus on completion of projects launched earlier in FY12, but Aggarwal did not wager a forecast.
Shares of the company closed down 3.52% at Rs42.45 in a weak Mumbai stock market on Wednesday.