From Anna Salai to Dalal Street: How Arihant won Sacheti and Kela

For over four years, Equitas, the story goes, had been scouting for a piece of land for its headquarters. It was particular about the location—it had to be on or near Anna Salai, because being on Chennai’s most important road mattered.

But, given that it is one of the oldest and most developed parts of the city, land was not easy to come by. That is until an intermediary introduced the bank to realty company Arihant Foundations and Housing Ltd, in 2023. A few months before that introduction, Arihant, Chennai’s only listed real estate company, had partnered with the owners of a timber depot—the large land parcel, over 40,000 sq. ft, sat right on Anna Salai and had been in the family since pre-independence days.

In a few short months, Arihant sold the plot to Equitas for ₹300 crore, in what was one of the city’s largest end-use commercial purchases in recent times. Icing the cake, Arihant is also building Equitas’ swanky new office.

If you have no connection to Chennai, chances are you have never heard of Arihant.

When the 2025 Grohe-Hurun India Real Estate 150 list (ranks most successful companies by value) was announced in August, it stated that Arihant, incorporated in 1995, led the valuation growth chart of realty stocks with an extraordinary 1,086% jump to ₹1,400 crore in June 2025, over the year-ago period.

In the last one year, the company’s stock beat the Nifty Realty Index by a wide margin as well.

The stock surge followed a sharp increase in revenue growth in FY24 and FY25, coupled with rapid growth in net profit (see chart). However, the preceding years saw Arihant’s results yo-yoing, up one year, down the next. Its stock price mostly remained under ₹100 between 2010 and 2023. It closed at ₹1,060 on 23 September.

While Arihant’s revenue of ₹221 crore is a drop in the ocean compared to larger national counterparts, such as DLF, Godrej Properties and Prestige Estate, it has suddenly begun punching above its weight. What changed? Therein hangs a tale.

Modest ambitions

When Navratan Lunawath, whose family had moved from Rajasthan to Chennai in 1963 to set up a finance business, got into the real estate market in 1986 through partnerships under the name Arihant, the scale was modest.

While shaping many of Chennai’s old neighbourhoods, such as Kilpauk, T-Nagar, Koyambedu, Egmore and Teynampet, with their mid-to-premium-end residential apartments and mid-sized commercial buildings, Arihant kept things manageable, steering clear of large-scale projects.

That changed in 2008, when Arihant decided to develop a residential township, something Chennai had not witnessed until then, on a 70-acre land parcel in Perambur, to the north of the city. Not having executed such an ambitious project before, Arihant opted for a partner. “For Arihant, as a brand, it was a proud moment when the second largest developer in the country chose to partner with us," said Arun Rajan, CEO of Arihant.

That partner was Unitech.

Then, of course, disaster struck, as Unitech got enmeshed in controversies and court cases. Suddenly, Arihant was on its own. “The Chennai market knew only us. Buyers had put in money because our name was associated with the development," said Arun Rajan, CEO of Arihant. “We took on the onus of completing the development on our own."

That meant putting in the entire investment of around ₹800 crore instead of just 50%. All surpluses from other projects were channelled towards the North Town development almost until its completion in 2020.

While there was a delay, Rajan and Lunawath take pride in the fact that they kept their promise to their buyers. The impact, however, was massive. Considering the scale of the North Town project, Arihant did not pick up many other developments during that period. Combined with the additional investments in North Town, this meant revenues suffered.

Spreading its wings

Once the weight of the project was off its shoulders, Arihant spread its wings, and rapidly added new developments. It has wrapped up approximately 2 million square feet of projects since the completion of North Town, which has added to its revenue.

“As they say, what doesn’t kill you makes you stronger. In fact, the experience has given us confidence," said Rajan. “We felt that whatever legacy, brand goodwill and experience we have gained over the last 40 years, we should take it up a notch and the market is also conducive."

Sridhar Srinivasan, managing director, Chennai, at real estate services firm Cushman & Wakefield, seconds this assessment. “Customers want the confidence that a developer will deliver, and Arihant has a history of never defaulting, giving them significant credibility and a reputation for quality assets," he said.

The company has been mindful about the type and pace of its growth. “Arihant has a good balance between commercial and mid to high-end residential. They also have a strategy of building only in established locations and corridors like in Kilpauk, Adyar CBD, and OMR (Old Mahabalipuram Road)," said Jerry Kingsley, India head, Value and Risk Advisory & City Lead, Capital Markets–Chennai, at real estate services firm JLL.

Kingsley pointed out that pan-India developers play the business park game, where the development size is 1 million sq. ft and upwards. “Players like Arihant focus on mid-market commercial development, in the 1 lakh sq. ft to 5 lakh sq. ft range. There is a large base of clients for that in Chennai," he added.

In the residential segment, Arihant had tried its hand at budget and more affordable segments in the past, but since the pandemic it has firmly stuck to the premium and luxury residential segments.

“There is a noticeable shift in the residential market (post pandemic), away from budget and affordable housing towards the premium segment," said Cushman & Wakefield’s Srinivasan. “Buyers now want to upgrade their homes. With the rise of hybrid work models, there is a demand for larger apartments and more premium facilities, as people are spending more time in their homes."

In the first half of 2025, the high-end and luxury residential segments in Chennai captured 22% of the overall share and recorded 11% growth over the same period in 2024, according to a report by Cushman & Wakefield.

This is a country-wide phenomenon—a JLL report highlights that apartments priced above ₹1 crore accounted for more than 50% share in annual sales in 2024.

Arihant’s homes typically start at the ₹12,000 per sq. ft price point, while the average rate is around ₹7,000 per sq. ft in Chennai.

“The shift to high-margin projects in residential and commercial, which we did in the past four to five years, really worked very well for us. Along with the clear focus of doing projects in AAA locations," said Kamal Lunawath, Arihant’s chairman and managing director.

The company aims to operate projects in the 30-35% margin range.

A long-standing tradition Arihant has followed is joint development with land owners. The landowner brings in the land, and Arihant its construction, marketing and sales capabilities. In such co-developments, the company either goes for an area sharing approach, where the landowner retains ownership of a part of the finished project to sell or retain, or a revenue-sharing model, where the landowner gets a pre-decided share of the final proceeds. About 90% of the 20 million square feet the company has already developed has followed the joint development model.

With land being the most expensive “raw material" for a real estate developer, this model has meant that Arihant has managed to keep risks low and maintain an asset- and debt-light business model. However, this model has a limitation. Owners of land parcels that Arihant is interested in developing need to agree to it.

A surprise investor

While Arihant’s management was trying to find a solution to this challenge, an unrelated business event was brewing elsewhere, and it would have a direct impact on the company. Mithun Sacheti, the founder of jewellery startup Caratlane, secured a ₹4,621-crore exit from his company by selling his remaining 27% stake to Tata group’s Titan in 2023. Like all high net worth individuals, Sacheti, started looking at real estate as a significant asset class.

“Every city has a giant real estate player. DLF in Delhi, Lodha in Mumbai, Prestige and Brigade in Bangalore. There is a vacuum in the premium space in Chennai, with no other listed player," said Sacheti. “The peculiarity of the market is such that local knowledge is very important, so I was keen on partnering with a Chennai company," he added.

Sacheti further said that he realised the brand was bigger than Arihant’s actual size. The raw material—capital in this case, plus land—was the missing ingredient.

Sacheti, along with his brother Siddhartha, and the family office of Freshworks co-founder and former CEO Girish Mathrubootham, joined hands with Arihant last November to develop a commercial platform. Instead of depending on a landowner to agree to a partnership, Arihant now identifies prime land parcels and investors put in money to acquire them, allowing for a more proactive co-development model. They have already deployed ₹230 crore under this model, which is focused on commercial projects for now.

Separately, the Sacheti brothers, along with The Lotus Family Trust, managed by investor Madhusudan Kela, also acquired a stake in Arihant. The brothers now own around 16% in the real estate company.

All this galvanised the stock.

“The entry of marquee investors like Mithun Sacheti and Madhusudhan Kela is a big reason why the stock has jumped. It gives other retail and institutional investors greater confidence," said Abhijit Ramasubramanian, who runs finance consultancy firm AssetBot, which specialises in real estate, among other sectors.

This followed the Equitas announcement, which had already given the company some much-needed visibility.

Going for gold

Arihant now has about 20 projects totalling 5 million square feet of development in the pipeline, ranging from a hospitality cum commercial project to a premium residential housing one.

The real estate firm is also eyeing markets beyond Chennai, aiming to expand to Coimbatore. It has already tested the waters in Bengaluru with two projects. Overall, it is targeting five-fold growth in the next three years.

However, that growth, if it plays out as projected, will be on the back of a very modest base. Arihant’s cross-town rival, Casagrand, which started out in 2003, has executed projects in many more cities—Bengaluru, Coimbatore, Hyderabad, and Pune. The company generated revenue of ₹2,613.9 crore in FY24, a figure ten times higher than Arihant’s operating revenue in FY25.

As the company presses the growth accelerator, with new investors on board, questions around operational bandwidth could surface. Rajan says they are conscious of not over leveraging, be it in terms of capital or capacity.

Arihant’s management acknowledges that larger and specialised projects do pose challenges. Hence, they have opted for partnerships. For instance, the company has a tie-up with Ashiana Housing to develop senior living communities. In June this year, it entered into a non-exclusive joint venture with real estate major Prestige Group. The partnership, Lunawath said, will help with execution while lowering the risk of taking on multiple large transactions at once. Along with Prestige, Arihant could explore opportunities in retail and hospitality, going ahead.

CEO Rajan has to prove that the valuation jump was not a flash in the pan. As of now, he appears confident of sustaining the company’s performance.

“We have projects close to ₹6,000 crore in gross development value (projected total value) currently in the portfolio," he said. “That will get reflected over the next three-four years in the balance sheet. The next three years will be our golden period."