NEW DELHI: Ashwin Seth Group hopes to reach Rs 3,000 revenue in the financial year 2024-25. It had registered Rs 1,500 crore revenue in the financial year ended March 2024 and Rs 500 crore in FY23, informed Ashwin Sheth, chairman and managing director of the company.
It achieved sales revenue of Rs 1,486 crore in the FY24. The company is planning an investment of about Rs 1,500 crore in FY25 and Rs 2,500 in FY26 towards completing existing projects and expansion. Normally, the company works on gross profit margin of 25 per cent.
Sheth Homes, which is now the parent company, is also planning for Rs 2,000-3,000 crore IPO in the next 18 – 24 months at a valuation of about Rs 10,000 crore. The group has also undergone branding changes to help expand the business and is investing about Rs 20-23 crore for a six months re-branding exercise.
Its current debt stands at Rs 400 crore as of March 2024 which it has brought down from Rs 1,500 crore in March 2021. Sheth however said the debt is expected to increase in coming financial year as the company is looking to expand and will be taking on construction finance. However by the time we launch our IPO, we want to be zero-debt company.
Currently, the company is present in mid-segment, upper mid-segment and luxury segment and looks to expand into super-luxury segment in the future.
There are three approaches that we have- first we are working in joint ventures (JVs) with developers, second is redevelopment of housing societies and third is slum redevelopment. If it is a very prime land, only then we go for outright purchase. Over 50 per cent of our business comes from JVs, about 20 per cent from redevelopment, slum redevelopment is about 25 per cent and outright purchase is about five per cent, said Sheth.
In the joint ventures, the company is looking at both landlords and small developers who find it difficult to fund their projects.
There are three projects where we are working with NBFCs and developers having stressed assets and there are two projects where we have submitted the bids for projects which are under NCLT. All five projects are situated in South Mumbai and are luxury and super-luxury projects.Ashwin Sheth
As to why the company favours JVs over outright purchase, Sheth said, we wouldn’t like to block capital in, rather we want to maximize or leverage the capital so that we can work on more projects. So, while the profit margin are little less in compared to outright purchase they are mitigated with the quantity of projects we can work upon simultaneously under JVs.Existing portfolio
It has eight ongoing projects having 3.5 lakh sq ft area in Mumbai. Overall it is working on 35 lakh sq ft FSI and construction area of 65 lakh sq ft, the value of which is about Rs 4,320 crore.
New launches
The company launched one project in Jan-March 2024 and one in Apr-June 2024 quarter each having one million sq ft area. The topline for first project in Rs 4,000 crore and second project is Rs 2,800 crore. It will launch two projects in Jul-September 2024 quarter and three projects in Oct-December 2024 quarter.
It has signed about seven new projects in Mumbai under JVs which we will launch in coming year or two. The company plans to invest about Rs 400 crore of which about Rs 150 crore it has already invested. The new acquisition that have happened will have a revenue potential of Rs 28,400 crore during the lifecycle and will be delivered in the next 5-6 years.
Apart from Mumbai, in Bengaluru the company has acquired three projects and they will be launched in coming one year. One is 50 acres villa development, other is 60 acres plotted development and third is five lakh sq ft mixed-use development. The company is investing about Rs 70-80 crore.
It is also looking to expand in Chennai, Pune, National Capital Region (NCR) and Hyderabad and plans to invest about Rs 25-50 crore in each of these cities.
The company aims to give possession of 2,000 apartments in FY25 and 1,600 flats in FY26.
Chintan Sheth vs Sheth Developers
The company had been embroiled in a legal case where Ashwin’s both sons have filed case in NCLT against him and Sheth Developers over management issues. Ashwin however said that “the matter is more or less resolved” and both Chintan and Maulik Sheth have 40 per cent stakes in Sheth Developers.
