Maharashtra’s Stamp Duty cut may boost the real estate sector: Dhaval Ajmera

Dhaval Ajmera, Director, Ajmera Realty & Infra (I) Ltd., talks about Maharashtra government’s stamp duty cut and its impact, ongoing & panned projects, liquidity situation, inorganic growth opportunities and real estate prices among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: How do you see Maharashtra Government’s decision to reduce the stamp duty on real estate sector and can you see an immediate pick-up in demand as the reduction will be effective till December?

A: The government has taken a proactive step and it was a need of the hour. So, the government has taken a good step to give a boost to the real estate market. As of today, we all know that the real estate market is a sector that supports around 250 other industries, like the ancillary industry connected to the real estate sector. The real estate industry is the second largest employer after the agri market. This boost will create a lot of interest in the market and incentivize people at a time when the interest rate for home loans is less. Plus the added benefit of the reduced stamp duty will give to push to the home buyers who were thinking of owning a house amid the pandemic but were sitting/ postponing their decision till date. I am confident that there will be a sales push in the real estate sector.

Q: Update us about the current ongoing projects of your company? Also, tell us about the product pipeline that is being planned and the geographies where the projects are?

A: As far as our projects are concerned then today we have running projects at Wadala in Mumbai, Kalyan, Bangalore, Ahmedabad and Pune. We have many projects in these locations and they are almost ready. Since the start of the new year and even before we have seen a trend in which people have an active interest towards the ready stocks and they are reaching the project sites to have discussions and get them booked So, positiveness in the market has slowly started moving and the boost provided by the government will create a positive environment. Thus, these things are quite positive. If we talk about the future then we will announce our projects at two-three places in Mumbai and they are going to be lower size flat and that will be at the right ticket size. We will be launching projects in Bangalore and Pune. We have ongoing projects in Bahrain and London. Overall, it seems that people have understood the importance of a house amid this pandemic and this signals that the future of the real estate sector is going to be very good.

Q: Let us know about the liquidity situation of your company and do you have enough funds for the upcoming projects? What are your plans to raise more funds?

A: All our projects are self-sufficient. Even the funding tie-ups in terms of construction finance is in place. We are getting a boost from sales. So, all put together our projects are completely financially close and we don’t see any challenge. We are very confident about the projects that we have at present and the projects that will be announced this year in different cities, as the financial closure is in place. So we will see to it that the ongoing projects and those which will be launched in future will start to complete end. The availability of financial closure and sales is giving a boost and making us more confident that we will not have any issues in completing these projects.

Q: There are opportunities for inorganic growth and distressed assets are available in the market. Is Ajmera Realty looking forward to opportunities to pick up some assets?

A: Pandemic is such an opportunity in which if we get something that is good and provides a win-win situation and we can tie-up with the outgoing company in which both are benefitted and which is fair to the market then we are absolutely open. Today we are looking towards such opportunities but it depends because we are seeing that people are still not coming out but I feel that there will be a consolidation in the market, which will benefit the people as well as the developers. So, if it is a fair-fair and win-win situation for both then definitely, we are interested.

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Q: There were price-related concerns in the real estate sector. How it is correcting now and do you think that the prices have bottomed out and will go up from here? Prices also have an impact on the margins, so what is your outlook for margins and prices? Also, let us know about the kind of development you have seen in the affordable housing space? 

A: If you have a look at the real estate market in the last three-four years then there was demonetization and impact of GST, RERA and NBFC funding among others. So, impacts were seen everywhere under which the prices have corrected in the last three-four years. Now, when the pandemic has arrived then people have realized that the real estate prices have bottomed out. If we have a look at the enquiries that we received in the last three-four months than it seems that people have learnt that the real estate prices can’t go below this level. The actual buyers who were sitting after deciding with the hope that the real estate prices will go down further. But today, people have actually realized and are moving forward. So, I don’t think that there can be any more reduction in the prices because today real estate sector is just not related to construction, funding or construction fund but there are many things are related with the government, such as premiums that increase the cost. If we see all those things together then we will find that if any new project or the existing projects is sold below this level will go into a loss. And I don’t think that any developer or a businessman will want to do a loss. So, the current prices are a bottomed out and its impact is visible in the market as buyers are coming out to buy. A slight movement in real estate sales is also visible to us.