HDIL in talks to sell 200 acres of land in Baroda, Hyderabad
HDIL also plans to sell 70 acres of land in Kochi
New Delhi: Realty firm HDIL is in talks to sell about 200 acres of land parcels in Baroda and Hyderabad as part of its strategy to offload non-core assets to improve cash-flows and cut debt. The Mumbai-based developer is targeting to reduce its net debt by 15 per cent in this fiscal to below Rs 2,500 crore.
"We are in advance stage of discussions to sell our land parcels in Baroda and Hyderabad. We expect that the two deals would happen by end of this year," said HDIL Senior Vice President, Corporate Finance & Investor Relations, Hari Prakash Pandey.
The potential buyers are conducting due diligence on both these land parcels, he said, adding that the company has an industrial plot in Baroda. HDIL also plans to sell 70 acres of land in Kochi when market conditions in the southern city improves as the company wants to concentrate on real estate market in and around Mumbai. Pandey said the funds raised from sale of these two land parcels would be used to meet working capital requirements and reduction in debt. HDIL's net debt came down by 10.41 per cent during last fiscal at Rs 2,942 crore as on March 31, 2015.
Asked about the debt reduction plan, Pandey said: "Our net debt has declined during the last financial year to about Rs 2,950 crore. In 2015-16, we intend to bring it below Rs 2,500 crore". On fund raising plans, he said the company does not have any requirement to raise any debt or equity although it has taken a board approval to raise USD 350 million as an enabling resolution. HDIL reported 72 per cent fall in consolidated net profit at Rs 31.89 crore for the quarter ended March, 2015. Total income fell to Rs 162.68 crore in January-March period of last fiscal against Rs 259.27 crore in the corresponding period of previous year.
For the full 2014-15 fiscal, HDIL's net profit increased by 23 per cent to Rs 218.66 crore. Total income rose by nearly 14 per cent to Rs 1,083.12 crore in the last fiscal. "We follow project completion method of accounting for revenue recognition. Therefore, comparison of quarterly figures does not give correct picture," Pandey said. HDIL has a land bank of 243.99 million sq ft. It has completed construction of 100 million sq ft since inception in 1977. It has 23 ongoing projects with 30.55 million sq ft area under construction.