Mahindra Lifespace Developers, the real estate and infrastructure development business of the Mahindra Group, is looking to build a pipeline of projects with a development value of over Rs 45,000 crore as part of its strategy to achieve five-fold growth in pre-sales in the next five years, said a top company official.
The new business pipeline target is nearly 10 times its current size, as the company has so far maintained its project pipeline between Rs 4,000 crore and Rs 5,000 crore.
“We are changing the trajectory significantly. What we would have done in ten years, we are trying to do in five years,” Amit Sinha, MD & CEO, told ET.
The company is looking to focus on joint developments, housing society redevelopments, and the acquisition of land parcels on an outright basis to augment its gross development value (GDV) during this period in its focus markets of Mumbai, Pune, and Bengaluru.
To support this growth plan, Mahindra Lifespaces will be deploying over Rs 7,500 crore through internal accruals and capital infusion from the parent Mahindra group as well as institutional investors.
“Mahindra & Mahindra has highlighted us as a growth gem in the Mahindra portfolio. M&M is going to put in all the resources and investment as needed as a shareholder to support our growth plans,” Sinha said, adding that the company has its own resources to support around 50% of the required capital of Rs 7,500 crore.
In addition to this, the developer may consider inducting a financial partner either at a platform or project level and is also open to raising debt given its low debt-equity ratio.
“We are also very conservative on our debt-equity ratio. We can stretch ourselves a little bit, even by our conservative standards… We really want to invest behind it, in terms of both resources and people, and we want to see this business flourish,” Sinha said.
The company’s pre-sales stood at Rs 1,812 crore in 2022–23 and at Rs 1,243 crore in the first nine months of the current financial year. It has also sold Rs 800 crore worth of apartments in its recently launched project in Kandivali suburb.
Prior to his appointment as Mahindra Lifesapces’ MD & CEO, Sinha was part of the group’s strategy team as President, Group Strategy, and has led several high-impact projects covering growth, transformation, and capital allocation across group companies over the past couple of years.
Most of the targeted growth will come from the company’s residential business, while the industrial segment will continue to be stable.
“Our experience has been quite good on the redevelopment side, too. These are customers who trust the Mahindra brand, and we have a huge number of interests from societies that want Mahindra to be a partner. We are carefully choosing those societies where the size is right and the community is right,” Sinha said.
The company has secured rights to redevelop two housing societies in Mumbai in the last year, including Rs 600- crore and Rs 1,000- crore GDV projects in Santacruz and Malad suburbs, respectively.
In redevelopment projects, according to Sinha, the developer is looking to focus on projects with a GDV threshold of Rs 1,000 crore, with the exception of a few strategically important micro markets for the company.
In the planned development business, the company recently launched its second project in Chennai after selling out the first project in the southern city.
“Plotted development, for some reason, we had not done enough of it, but in my future strategy, horizontal development plays a significant role, and for the simple reason that you can get in and get out quickly,” Sinha added.
Mahindra Lifespaces’ development footprint spans 35.06 million sq ft of completed, ongoing, and forthcoming residential projects across seven Indian cities. Its current portfolio includes 14.48 million square feet of space across 14 ongoing and five new projects.
It also has over 5,000 acres of ongoing and forthcoming projects under development, management at its integrated developments and industrial clusters across four locations.
Mahindra Lifespaces’ net consolidated total income stood at Rs 88.77 crore in Q3 FY24, a dip of 55.20 per cent from Rs 198.14 crore it recorded in the similar quarter last year.
