Parsvnath to cut net debt by nearly 60%

MUMBAI: Realtor Parsvnath Developers expects to cut net debt to 7 billion rupees by December as revenues from projects start to flow in, a top official said on Monday.

“We expect the net debt to reduce further in the current financial year, but this would not be substantial. By the end of this calendar year, we expect a substantial reduction to around 700 crore (7 billion rupees),” Chairman Pradeep Jain told Reuters in an interview.

As on Dec. 31, 2010, the company’s net debt was 11 billion rupees, he said, adding the reduction would be affected through internal accruals and revenues from ongoing projects.

The company would also look at increasing property prices in select projects by 5-10 percent across north India . These would be in Delhi, National Capital Region and nearby areas, he said without elaborating. “Earlier, during the slowdown time, prices declined… and now, after the revival, the prices are expected to go up.”

Parsvnath has a land bank of about 195 million square feet (18.12 million sq metres), of which 80 million square feet has been on fast track for completion, he said.

STAKE DILUTION

The New Delhi-based developer is not looking at diluting stake or roping in private equity firms in the company. However, it would continue to look at investments at project levels. “Going forward, if any good opportunity comes, or any good private equity proposals come (at project level), definitely we are happy to look at it. It is not that we are very aggressively looking, and there is nothing expected to be concluded in the short term.”

The company is also planning to develop 4.5 million square feet of residential properties and 0.5 million square feet of commercial ventures on the recently won Railway land. In Nov 2010, Parvsnath had won a bid for 38.3 acres (15.50 hectares). Jain declined to comment on the investments for the project stating it as “confidential”.

The company is waiting for approval for the special purpose vehicle set up for the rail land development in which it is looking at roping in foreign direct investment. The company, however, has already engaged architects and consultants and started work on the project. “I think it would take another two months’ time to work out the planning, which needs to be submitted for approvals.”

Declining to provide an outlook for its Oct-Dec quarter, Jain said “the quarter looks good.” At 3.19 p.m., shares of the company were trading lower by 3.33 percent at 52.20 rupees in a steady Mumbai market.