Page 35 - Kolte Patil AR 2019-20

Sheet. Besides, the cost of available to the rest of the critical mass, it bought out will infuse 10% in the land;
long-term debt declined by sector. the financial interests of the partner will infuse 90%;
160 bps to an average 10.5% its partners, resulting in a after a minor coupon, profits
during four years; net debt- Partnerships larger economic ownership will be equally shared.
to-equity ratio strengthened The Company maximised of projects, strengthening This judicious approach
from 0.53x to 0.35x during value through the prudent surplus visibility.
this period. utilisation of net worth made it possible for the
and declining deployment A high ~75% equity Company to outperform
Discipline of debt. Instead of the ownership of the promoters returns available through
Over the years, the Company conventional approach in the Company indicates a competing asset classes and
strengthened the integrity of mobilising additional high commitment that can the best benchmarks within
of its Balance Sheet net worth through equity make it possible to mobilise those asset classes.
through judicious capital dilution, the Company funds (equity or debt) should
allocation in profit-accretive inducted financial partners a situation warrant.
business development for specific projects. This Post-Balance Sheet
and differentiated deal approach helped accelerate development
structuring. project construction and Big numbers
completion on the one hand The Company emerged as
The Company focused on while it enhanced value the first Indian real estate
Company to enter into an
asset-light development on the Company’s Balance agreement with a global 352
where the land was Sheet on the other – without
provided by the real equity dilution. Following real estate developer during C Crore, aggregate net
estate partner; besides, project completion, the the coronavirus pandemic.
the Company resisted the profits were shared in a The Company (through worth enhanced in
temptation to increase prescribed ratio. This non- its subsidiary Kolte-Patil the five years ending
proprietary ownership of dilutive approach helped I-Ven Townships (Pune) FY20
land banks, selecting to the Company protect overall Limited) entered into an
focus on efficient property shareholder interests while agreement with Planet
development instead. This the accelerated project Smart City, a UK-based 0.53x
approach enhanced the completion enhanced real estate developer for
efficiency of the Company’s financial efficiency. the land monetisation of a
financial resources, kick- portion of Sector R10 in its Gearing, FY17
starting a virtuous cycle. Over the years, the Company Pune township project Life
selected to partner global Republic for C91 Crore.
The Company focused on and Indian financial
addressing the growth R10 will be jointly developed 0.35x
The land parcel in Sector
coming out of the fast- institutions that provided
the Company with an
moving mid-priced real by KPIT and Planet Smart Gearing, FY20
estate segment, increasing immediate (and prospective) City with a profit-sharing
capital pipeline. The
sales velocity. approach; the project is
Company engaged financial likely to be launched in
The Company maintained partners of the pedigree Perspective
its credit rating at CRISIL of Portman Holdings, FY21. The agreement “We have a protocol
will provide the Company
A+/Stable (Outlook revised JP Morgan, KKR, ICICI of maintaining our
from ‘Positive’ and rating Ventures, Motilal Oswal with liquidity for land debt-to-equity ratio at
monetisation; it will enable
reaffirmed), arguably and ASK, among others.
one of the highest in the These partners possess the Company to engage 0.5 times. Currently
with a global partner who
sector, making it possible deep financial resources we are at 0.35 times,
to mobilise debt at rates and a knowledge network. can enhance the Company’s so we have a buffer in
process discipline, practices
lower than what they were As the Company enhanced hand equivalent to C125
and governance. Kolte-Patil Crore. The result is that
we have a mindset of
The coming together of culture and discipline managing our debt at
C100-125 Crore plus/
minus during the year
Quick Sales Low inventory Low High and that too within the
gestation collections limits of our 0.5 times
debt-to-equity ratio,
which should protect
our competitiveness
across all market
Quick execution Stronger Low leverage cycles.” – Gopal Sarda,
technology Group CEO

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