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INFORMATION
MEMORANDUM
(PROJECT NAME:
)
(PROJECT LOCATION:
)
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INFORMATION MEMORANDUM
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Executive Summary
4-5
1. Real Estate Macro Scenario ..
6-22
1.1
Indian Scenario
1.2
Delhi & NCR
2. About the company.
23-29
2.1.
Introduction
2.2.
Project implemented
2.3.
Board of Directors
2.4.
Key Managerial Personnel
2.5.
Shareholding Pattern
2.6.
Debt Profile
2.7.
Financial Indicators
3. Present Proposal
40
3.1.
Facility Desired
3.2.
Assessment of Equity/debt or mezzanine
3.2.1. About the project
3.2.2. Location of project
3.2.3. Project Implementation Schedule
3.2.4. Status of the Project
3.2.5. Approvals & Consents
3.2.6. Marketing Strategy
3.2.7. Cost of Project
3.2.8. Means of Finance
3.2.9. Detailed Cost of Project
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46-
6. SWOT Analysis
51
7. Confidentiality
52
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INFORMATION MEMORANDUM
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2015 Outlook:
The Indian market is vigilantly enthusiastic with the new government
proactive approach and business confidence has already started picking up.
Various agencies such as Moody, IMF, World Bank predicted handsome GDP
at 6.3 to 6.4% and forecasted Indian outlook as steadily growing at lower
risk. Although, it is difficult to forecast the real estate market which is highly
sentiment driven in India. In 2015, overall property markets are expected to
continue edge further into recovery. There are several factors that can be
considered as key drivers for the sector in 2015, such as easing pressure of
downside risks for rupee and current account deficit, improving export. In
commercial real estate, REITs will remain the hottest topic. Real estate funds
like Blackstone, Brookfield, Xander and Redfort have already started planning
to launch REITs in India. Also large developers like DLF, Prestige Estates, RMZ
Corp, Embassy, and Phoenix Mills Ltd. are queuing up to tap into the REIT
opportunity. In residential segment while absorption in the luxury segment is
expected to remain under pressure due to high price points, the launches in
the mid-end and low-end segments will continue to have traction at the
introductory prices. What middle income home buyer actual wants is project
with basic amenities with the price point which he can afford. It was
observed that even during the recession time, projects with right price point
witnessed high absorption level. Overall, capital values are expected to
remain stable in most of the market in short to medium term due to ample
stock availability in both primary and secondary markets.
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The year 2014 has been quite fruitful for the real estate sector in terms of business
sentiment, although the real effect of many of the policies and amendments
announced in 2014 will take effect only in 2015. Starting from Union Budget
FY2014-15, where affordable housing was considered on par with infrastructure, to
relaxation of rigidities in the Land Acquisition and Real Estate Regulatory Bill, Indias
new Prime Minister has been offering the India real estate sector consistent doses of
energy. The winds of change are now blowing more perceptibly. Inflation, including
the house price component, has now been reduced to the lowest level in recallable
history. Property buyers are back in force in most cities as enquiries have
rebounded, and developers are finally reading the writing on the wall more
accurately and coming in with the kind of supply that is relevant to demand. Going
by the recent reports of recruitment agencies, many more jobs will be created in
2015 - especially in the IT/ITeS, manufacturing and services sectors - and the
demand for homes will increase visibly. Also, REITs are hitting the market at long
last, and only a few details need to be sorted out before they get the funding wheels
spinning.
2015 will definitely be a good year for the real estate sector on three
counts:
The threat of inflation has completely submerged, and borrowing rates are
sure to go down from the current levels. This will encourage potential buyers
planning to avail of home loans to finally take the plunge. Also, with property
prices staying stable and good deals being offered by developers in order to
clear their inventory, fence-sitting buyers be further encouraged to press the
buy button.
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Economic activity is gradually picking up, and the Central Bank anticipates
GDP growth to reach 6.5% y/y in the next financial year (FY2015-16).
Corporate India has already made it clear that there will be more hiring of
talent to help tackle rising business activity. Put together, this means a rise in
jobs and incomes, which in turn is very favourable for both residential and
commercial real estate.
The market has witnessed a re-orientation and developers are now largely
focusing on affordable homes. This will go a long way, though definitely not all
the way, in bridging the existing wide gap between demand and supply of
affordable homes.
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In 2015, developers will become more earnest about right-sizing and right-pricing
their offerings. Smaller, yet better-designed and more efficient homes will define the
residential real estate market in 2015, and selective corrections in some of the overpriced cities will help bring about faster sales for stagnated supply of larger
configurations. Townships will become more prevalent, and the supply of luxury
homes will moderate to align with the slow demand dynamics for these offerings.
Affordable Housing:
Affordable housing in India refers to housing for the economically weaker section
(EWS) and lower income group (LIG) households. This segment is expected to
account for 85-90 percent of the total residential development (number of housing
units) i.e. about 40-45 million housing units by 2028. Affordable housing in India
ranges from 250-650 Square feet and typically costs between USD 8000-17000 per
unit. Considering an average housing size of 400 square feet, India requires about
15-18 billion square feet of development in this segment.
Affordable housing will clearly be the flavour of the season in 2015. While the ruling
government at the Centre and the Central Bank have clearly spelled out their
intention to push for affordable housing, it is the State governments which will need
to take the implementation initiative. The recently concluded elections have clearly
indicated that better governance, planning and good implementation are factors on
which performance will be evaluated, and affordable housing is an important
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In 2015, demand will remain in this range, marginally improving from the level seen
in 2014. However, with the rupee weakening to below INR 62/USD at the current
time and Indias GDP growth likely to strengthen further, the positive risk to this
forecast of a sharp uptick in demand cannot be ruled out though. Interestingly,
while office real estate have not recovered fully from the fall in prices post GFC
(unlike residential) there is significant room for upside in the event of a positive
change in business sentiment. In fact, such an improvement was already seen after
the general elections and is already reflecting in year-end office market leases. The
trend of moderate-to-healthy leasing activity will continue in 2015.
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Smart Cities:
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over a smaller area of 100 hectares. It has a special economic zone that
seeks to replicate Dubai's smart city project. Naya Raipur is also being built
as a smart city. There are also plans to build seven smart cities along the
Delhi-Mumbai Industrial Corridor.
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The Securities and Exchange Board of India (SEBI) has notified final
regulations that will govern real estate investment trusts (REITs) and
infrastructure investment trusts (InvITs). This move will enable easier access
to funds for cash-strapped developers and create a new investment avenue
for institutions and high net worth individuals, and eventually ordinary
investors.
The Telangana Real Estate Developers Association (Treda) plans to host the
Fifth Treda Property Show 2014 at Hitex Centre, Hyderabad. The show will be
open to a mix of the populace, including prospective property purchasers,
investors, architects and others.
The State Government of Kerala has decided to make the process of securing
permits from local bodies for construction of houses smoother, as it plans to
make the process online with the launch of software called Sanketham. This
will ensure a more standardised procedure, more transparency, and less
corruption and bribery.
As the Indian economy grows, the real estate sector keeps benefiting. With
the increase in foreign tourist arrivals (ETA) every year, there is demand for
real estate in the tourism and hospitality sector. Also, with the entry of major
private players in the education sector, the major cities, that is Hyderabad,
Bangalore, Mumbai, Delhi, Pune, Chennai and Kolkata are likely to account
for 70 per cent of total demand for real estate in the education sector.
Demand for improved healthcare facilities is also expected to provide a boost
to the construction sector in the country.
Investments:
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Assotech Realty has tied up with Lemon Tree Hotels to manage and operate
its serviced residences. The first project, 210 apartments under the branding
of Sandal Suites, will be launched in Noida in 2015. The companies will
launch 8-10 similar projects in a phased manner over the next seven years
with an investment of Rs 8000-9000 million (US$ 129- 145 million)
approximately.
L&T Infra Finance Private Equity (PE) plans to raise Rs 37,500 million (US$
607 million) in an overseas and a domestic fund, and launch a real estate
fund.
IDFC Alternatives Ltd has sold two of its real estate investments to PE firm
Blackstone Group LP. The assets - a special economic zone (SEZ) in Pune and
an information technology (IT) park in Noida - were sold for a combined
enterprise value of Rs 11, 000 million (US$ 178 million).
Goldman Sachs plans to invest Rs 12,000 million (US$ 194 million) to build a
new campus in Bangalore that can accommodate 9,000 people. The new
campus is being developed in collaboration with Kalyani Developers on the
Sarajapur Outer Ring Road, Bangalore.
Snap deal has entered into a strategic partnership with Tata Value Homes to
sell the latters apartments on its e-commerce platform, which marks the first
time that an e-commerce company has tied up with a real estate venture.
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INFORMATION MEMORANDUM
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INFORMATION MEMORANDUM
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Gurgaon Vs. Noida:Noida and Gurgaon are both the modern cities of India and has witnessed a lot of
infrastructure developments in last 10 years. Both the cities are in fact competitors of
each other when it comes to developing new infrastructure such as skyscrapers, metro
rail, transport facilities, entertainment and shopping facilities and few other things.
Hence, it sometimes becomes difficult to choose one of these cities for investment or
living purpose. But to ultimately decide which city is better of two, we will explore some
key differences. Despite being so many similarities, there are lots of differences too in
terms of environment, facilities and most importantly real estate market of Noida and
Gurgaon.
Preferred Destination:
While Noida is witnessing to be a home to a large number of Indian and international IT
and manufacturing companies, Gurgaon on the other hand has become the preferred
destinations for at least half the Fortune 500 companies by October 2013. Noida is a
major hub for multinational Indian and foreign IT outsourcing firms such as Sapient,
Fiserv, Headstrong, HCL, Tech Mahindra, Adobe Systems, AON Hewitt, Fujitsu, CSC, TCS,
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Infrastructure Developments:
Both cities have witnessed a tremendous growth in both residential and commercial
infrastructure and demand has almost never beaten the supply except few delays due
to Noida Extension land dispute which is yet to be resolved. Gurgaon has been home to
as many as 1100 residential skyscrapers with modern planning. But most of the
Gurgaon lacks proper urban infrastructure with broken roads and streets that often
leads to traffic jams. On the other hand Noida Infrastructure has been planned in a
better way and offering wide roads, better water treatment facilities, better public
transport and most importantly the basic residential facilities in sectors.
Noida follows a better approach to town management. The suburb has well laid-out
residential and commercial sectors with wide roads, flyovers and under-passes and
plenty of local shopping complexes in each sector. Film City in Noida is the home to
Indias top media companies including Aaj Tak, NDTV, IBN, Zee and more because of its
easy and quick connectivity with the Political capital of India, New Delhi. However
Gurgaon too is located to close proximity to New Delhi but does not offer that much
ease of connectivity.
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Future
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INFORMATION MEMORANDUM
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INFORMATION MEMORANDUM
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INFORMATION MEMORANDUM
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Projects by the group:The group ventured into organized Residential & Commercial development about
15 years ago, and we are executing/ going to launch the following projects:
1. XYZ Pvt. Ltd.
Project Name: XXXXXX (Residential)-
The first Residential project launched by the group is by the name of XXXXXX. It
is a development of private, detached and opulent apartments spread over 15
acres. Its a 3 side open corner plot offering lavish Villas and 1/2/3/4 bedroom
apartments. ABC Group, the developer of XXXX is known for providing
innovative engineering solutions, by having the capacity to gauge market
requirements and consumers with the required results. The deliverables are
consumer oriented and they are highly modernistic in approach that are made
keeping in mind the end utility.
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Management Overview
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INFORMATION MEMORANDUM
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Name of Bank/ FI
(date)
Sanctio
ned
Limit
Rs. In Cr.
Curren
t ROI
(%)
Repayme
nt In Cr.
Amount
Outstandi
ng Rs. In
Cr.
14.5
14.5
9.62
10.25
10.25
6
4
5
4
3
3
4
2
2
2
Project
Name
XXXX
XXXX
XXXX
XXXX
XXXX
9
8
7
6
5
FINANCIAL INDICATORS: 30 | P a g e
INFORMATION MEMORANDUM
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Financial Parameters*
31st
March
2013
31st
March
2014
31stMarch
2015
Current year
Prov.
(3M/6M/9M)
(In case of
listed
company)
March13
(In Rs.)
March14
(In Rs.)
March1
5
(In Rs.)
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March'12
(In Rs.)
March'1
3
(In Rs.)
March'14
(In Rs.)
Current Assets
Current Liabilities
Net Working Capital
Net Working Capital (in
Crore)
Note:- Current liabilities numbers include advance received from customers.
Advance received from customer ll become part of revenue numbers once we
comply under mentioned conditions:
* Revenue reorganization:
a) 25 percent cost of construction and development (excluding land cost, cost
of development rights and rehabilitation costs) to be incurred;
b) Sale of at least 25 percent of the saleable area;
c) Collection of 10 percent or more at the reporting date, at the individual
contract level.
March'13
(In Rs.)
March'1
4
(In Rs.)
March'15
(In Rs.)
Current Assets
Current Liabilities
Net Working Capital
Net Working Capital (in
Crore)
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9. Project Financials
9.1.
9.2.
9.3.
9.4.
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Promoters are into the same line of business for the past 16 years.
Promoters are financially sound to face any challenge.
Customer Service & Satisfaction,
Good Clientele,
Higher product quality,
A green company (recycling, energy, water)
Respecting Customers.
Weaknesses
Company does not have any big project which is delivered through company
Opportunities
Threats
A deep recession.
Growth Challenge.
2. Confidentiality:
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INFORMATION MEMORANDUM
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INFORMATION MEMORANDUM
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