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Macrotech to pare debt through sales, asset monetisation

Bengaluru: Macrotech Developers Ltd, which sells under the Lodha brand, will reduce its debt to 10,000 crore by March 2022, through collections from home sales along with sale of land and one rental office asset, said a top executive.

The Mumbai-based developer’s net debt for its India business is at around 12,508 crore.

Following the second wave of the covid-19 pandemic, Macrotech clocked 3,450 crore of sales for the September-ended quarter. Its sales bookings in India stood at 2,003 crore during the second quarter, and an additional 1,450 crore from its two projects in London— Grosvenor Square and Lincoln Square.

Collections (from sales) for the quarter stood at 1,912 crore.

The company, which listed on the stock exchange in April, is aiming to achieve its pre-sales guidance of around 9,000 crore in 2021-22.

“The September quarter is seasonally a weak quarter for real estate, so in that context, we have done very well. But like last year, 2021 is also a unique year. Collections follow sales, and so, after a disruption (like the second wave), collections get impacted. We have been on a debt reduction mode, and it will be done mostly through regular sales and the rest will be through sale of (non-core) assets like warehousing assets as well as a commercial rental asset,” Abhishek Lodha, managing director and CEO, Lodha Group said in an interview.

Lodha expects about 8,000 crore to come in from home sales and another 1,000 crore from the asset monetization, which is expected to pick in the second half of the current financial year.

The company’s debt, which stood at 16,076 crore as on 31 March 2021, was reduced by 23% to 12,435 crore at the end of the April-June quarter.

During the July-September period, Macrotech also closed a new joint development agreement in Mulund, in suburban Mumbai. With this, it has signed five JDAs since April, in Mumbai Metropolitan Region (MMR) and Pune, where the projects hold a cumulative gross development value of about 4,500 crore for an estimated saleable area of around 4 million sq ft.

“Sales have been good across price points and the positive thing is, even our under-construction projects are selling well. We have a significant launch pipeline and plan to launch 4.5-5 million sq ft in the coming months. The upcoming projects will allow us to enter new micro-markets in MMR,” said Lodha.

Home sales in MMR during the January-August period have risen more than three times to 1.33 trillion, according to a recent joint report by CREDAI-MCHI and CRE Matrix. During January-August 2020, MMR saw sales of 41,353 crore because of the adverse impact of the pandemic.

“With the upcoming festive season, we are confident that we will see a huge increase in sales because consumers are so keen to move into a bigger and better home,” he added.

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