Housing Development and Infrastructure Limited (HDIL) is a real estate company with operations in Mumbai and around its neighbourhood areas. HDIL’s business involves construction and development of residential projects, commercial and retail projects, slum rehabilitation and land development. The company also clears slum land and rehouses slum dwellers. The company develops infrastructure on land which is sold to other property developers.HDIL is part of the Wadhawan Group (formerly Dheeraj Group), and has been involved in real estate development in the Mumbai Metropolitan Region for almost three decades. As of December 31, 2006, the Wadhawan Group has developed approximately 62.1 million square foot of saleable area. It has constructed approximately 16.3 million square foot of rehabilitation housing area under slum rehabilitation schemes. HDIL's promoters are Rakesh Kumar Wadhawan, Sarang Wadhawan, Kapil Wadhawan, and Dheeraj Wadhawan, who, together with the rest of the Promoter Group, hold about 73.2% of the outstanding share capital as of December 31, 2006. Sarang Wadhawan is the Managing Director of HDIL.
HDIL has built groups of apartments, multipurpose townships and towers for sale to individuals. It has also constructed office spaces, multiplex cinemas and shopping malls. HDIL undertakes slum rehabilitation projects under a Government scheme administered by the Slum Rehabilitation Authority in which developers are granted rights in exchange for clearing and redeveloping slum lands, including providing replacement housing for the dislocated slum dwellers.
Apart from Mumbai, they are planning to have presence in Kochi and Hyderabad as well. The expansion plans include building special economic zones, hotel projects and megastructure complexes. HDIL's total land reserves comprise approximately 112.4 million square foot of saleable area to be developed through 32 ongoing or planned projects. They have 21 ongoing projects, which are under construction and development, aggregating to approximately 45.9 million square foot of saleable area, and they have additional 11 projects, which are planned for construction and development in the future, aggregating approximately 66.6 million square foot of saleable area.
Another company belonging to this group, Dewan Housing Finance Corporation is listed in both BSE and NSE. The company offers loans to the lower and middle income groups.
HDIL sponsored the umpires’ shirts during Champions trophy in India in the year 2006 and also during the ICC Cricket World Cup in West Indies in the year 2007.
ICC Cricket World Cup 2007
Umpires Billy Bowden (New Zealand) and Aleem Dar (Pakistan) in a Super Eights match Australia v Bangladesh, Antigua on 31.03.2007
Image courtesy: www.cricinfo.com & Getty Images
Project List (Residential):
| Project | Location | Status |
| Affaire | Bandra (W) | Under construction |
| Multiplex | Kandivli (E) | Under construction |
| Dheeraj Apartments | Jogeshwari (E) | Completed |
| Harmony | Goregaon (W) | Under construction |
| Row House | Kandivli (E) | Completed |
| Sneh | Bandra (W) | Completed |
| Swapna | Bandra (W) | Completed |
Project List (Commercial):
| Project | Location | Status |
| Arma | Bandra (E) | Completed |
| Dreams | Bhandup (W) | Under construction |
| Dreams The Mall | Bhandup (W) | Under construction |
| Kaledonia | Andheri (E) | Under construction |
Financial performance of the company:
The sales turnover and adjusted profit after tax since 2004 are given in the following table:
| Financial year | Turnover | Profit after tax |
|
| Rs. Crores | Rs. Crores |
| 2006 – 2007 * | 848.84 | 367.23 |
| 2005 - 2006 | 434.86 | 117.29 |
| 2004 - 2005 | 64.93 | 14.58 |
* Upto 31st December 2006
Details of the IPO:
Issue Period: June 28, 2007 to July 03, 2007
Issue Size: 2,97,00,000 Equity Shares (Excluding Green Shoe Option of 44,55,000 Equity Shares)
Issue Type: 100% Book Building
Face Value: Rs.10/-
Price Range: Rs. 430/- to Rs. 500/-
Market Lot: 14 shares
Retail Investor cap: Rs.100,000
Application forms can be downloaded from this link.
Red Herring Prospectus is available at this link.
Conclusion:
As the IPO is priced is at a discount to players of similar size, investors with a risk appetite may think of investing in this issue with a three or four years perspective. At the offer price band of Rs.430 – Rs.500, the P/E is 14 to 16 for the financial year 2006 -2007. Obviously it is difficult to compare this IPO with DLF in terms of issue size. Of late, Indiabulls real estate stock has been moving up in the stock market. We will have to wait for DLF stock to be listed to see how it is received by the market. But going the company’s financial performance in the last few years and their presence in Mumbai area which is the commercial capital of India, stock should be able to do well. Response to DLF issue was not great from retail investors (80% subscription only). We will have to see how they react to this IPO.