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Dharmendra Raichura, Managing Director, BSEL Infrastructure Reality
June, 05th 2008

BSEL Infrastructure Realty Ltd. started its journey in 2003 to grow multifold in the real estate sector. BSEL abandoned its earlier IT business Infrastructure and within a short span of four years became Rs1.20bn real estate company. The company, with an increased focus on infrastructure development, has projects dotting the map of India and Dubai.

Dharmendra Raichura, Managing Director, BSEL Infrastructure Reality joined the Institute of Chartered Accountants of India and completed his CA along with BCom. Dharmendra joined BSEL, when it forayed into infrastructure development. He coordinated with Lead Managers, Advisors, and Solicitors & Bankers for the completion of US$20.5mn GDR Issue, thereby getting BSEL Infrastructure Realty listed on the Luxembourg Stock Exchange in May 2006.

Speaking with Yash Ved of India Infoline, Dharmendra Raichura says, "We have a capacity to identify land at the right price and it does not exceed 20% of the cost of the project."

Tell us more about your expansion plans.

The Company is building six shopping malls in Nagpur to be developed jointly with Unity Infraprojects Ltd. The contract is worth Rs5.46bn with an area of about 1.2mn sq ft. Industrial parks at Madhya Pradesh, Gujarat and Nagpur for high grade IT companies are also coming up.

We are also developing an industrial park at the Rajiv Gandhi IT Habitat at Donna Paula, Goa. The company plans to build a new township at JNPT, near the Navi Mumbai Special Economic Zone (SEZ). The township should be ready by January 2012 and is expected to fetch Rs20mn in revenues for BSEL.

Another township to come up at Thane is expected to fetch Rs1.1bn in revenues. It will be ready by end of FY09.

Between hotels and malls, where are the margins higher?

The company has various ongoing projects in its portfolio that span across various categories like 5 star hotels, malls, multiplexes, IT parks, commercial complexes and luxury residential complexes. We get better margins from malls.

Brief us about your joint ventures.

Clear Water Capital Partners (Cyprus) Ltd. has taken 49% stake in the SPV company formed by BSEL Infrastructure Realty Ltd. We have also formed JV with Unity Realty & Developers Ltd. and Kamat hotels (India) Ltd.

The company has entered into a pre-bid alliance with international hotel group Accor Asia Pacific through its Indian arm AAPC India Hotel Management Pvt. Ltd., for the proposed International Convention Centre (ICC) at Bhubaneshwar. Adlabs Films will also partner with BSEL in this project.

Real estate is threatening to show a slowdown. What is your view?

As of now, Indian real estate prices may not see much spike. The situation is challenging because of key factors like land pricing and cost of materials, which have moved up. Cities like Delhi and Bangalore have been affected the most.

Tell us about your overseas ventures?

We have signed a MOU with Iskandar Regional Development Authority (IRDA) Malaysia for development of Iskandar Malaysia, Peninsula Malaysias most developed region. It has committed to invest Rs180bn over the next 12 years and IRDA will help the company seek approvals from various authorities for facilitating its development process.

The company is also constructing seven residential towers in the new Emirates City at UAE for a total cost up to Rs28bn and area under is 45,00,000 sq ft. The project is being undertaken by BSEL Infrastructure Realty (FZE), a wholly owned subsidiary of BSEL Infrastructure Realty Ltd.

Brief us on your financials?

On a standalone basis, the companys FY07 total income jumped 72% yoy, to Rs872.9mn from Rs505.7mn last year. The net profit for FY07 has risen 174% yoy, to Rs603.3mn from Rs219.9mn. Basic and diluted EPS on a standalone basis for the year is at Rs10.17 per share, against Rs6.02 per share last year.

During the year, the company paid shareholders an interim dividend of 21%, which may be regarded as the final dividend.

The H1 FY08 topline of the company is up 166% at Rs1.97bn against Rs742.6mn for the same period last year. The PAT stands at Rs607mn, 106% up from Rs294mn for the same period last year.

What are your core strengths?

We have a capacity to identify land at the right price and it does not exceed 20% of the cost of the project.

What is the promoters stake currently?

The promoters currently hold 35% stake.

Your dividend policy? Your message to shareholders?

The company has been consistently paying dividend. As regards to the message to shareholders, investors are co-operating us. We expect same kind of co-operation from them.

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