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Arihant Superstructure, Audience Matters Online12 December 2011

Ashok Chhajer

Chairman and Managing Director, Arihant Superstructures Ltd.

Ashok Chhajer, Chairman, Arihant Superstructures Ltd, has been augmented with 20 years of varied experience across sectors like Edible Oil Refinery, Textiles - Trading & Manufacturing and Real Estate.

After completing education in 1991, he took charge as a Managing Director for setting up an edible oil refinery under the name Sarvodaya Refinery Pvt. Ltd. in Rajasthan. Within a years time he successfully commenced the operations at the refinery and had also set up Marketing and Dealer Networks.

In the second half of 1993, Ashok Chhajer was relocated back to Mumbai head office where he took charge of the Textile business -Trading and Manufacturing. Established in 1988, the Arihant Superstructures is one of Navi Mumbai's premier real estate developers - with bigger, more challenging projects being added year after year. The Group provides stylish and comfortable living to more than 2200 happy families across Navi Mumbai. Arihant Group has emerged as one of the largest developers in Navi Mumbai.

Synonymous with consistent excellence, Arihant group has transformed the skyline of Navi Mumbai with epitomes of verve since its inception in the year 1988. Arihant Superstructures Ltd. (ASL), the flagship company and a BSE listed company, is ISO 9001:2008 certified.

With an uncompromising attitude in terms of quality control procedures, checks at all levels from building materials and construction methodologies to quality skilled manpower, the company has consistently aimed to create a benchmark in the real estate industry. Over the years his vision and strategic leadership has steered the conglomerate to a path of sustained growth.

In conversation with Apurva Pawar of AudienceMatters, Ashok Chhajer, CMD, Arihant Superstructures Ltd, talks about his company & the challenges, real estate industry and a lot more. Here are the excerpts. .

Brief us about Arihant Superstructures?

Arihant Superstructures Ltd. has presence across Navi - Mumbai and Mumbai-Thane region in Maharashtra and Jodhpur in Rajasthan. Currently the Company has 11on-going projects aggregating over 2.08 million sq.ft. area under Construction. There are few more projects lined up having a total Constructible area of approx. 7.43 million sq.ft. across Navi - Mumbai and Mumbai-Thane region in Maharashtra and Jodhpur in Rajasthan.

Arihant group has emerged as one of the largest developers in recent years; What are the marketing and corporate strategies of the group?

We have 5 Key attribute which drive our success they are; Transparency, Satisfaction, Return, Relation, value for money. As per marketing point of view; we are focused & zero down our target & design the product for them & configure it as per their requirement. Hence we get equally response & support from our buyers. We also do pre -launch campaign & advertisement like print, OOH, Electronic for creating the awareness of people for our projects.

You've been in the real estate & construction industry for quite a time now. So, how, you think, the global crises impacted the region?

Globalization and decoupling cannot happen at the same time. Although India is one of the fastest growing economies in the world, it cannot decouple itself from the slowdown in US. However, the impact of the same will be nominal.

What about the rising interest rates? How does it affect the real estate sector?

With the continuous rise in interest rates, the cost of borrowing for the developers as well as Customers has significantly gone up over the last 12-15 months. This has led to an increase in the total cost of input/construction which either needs to be absorbed or passed on to the customers. By passing on the increased cost to the customer the price of the flat goes up and thereby the customers face a double warming in the form of rise in cost of the flats on one hand and rise in the rate of interest on home loans on other hand. This in turn results in slowdown in sales to some extent. However, this phenomenon is across all the industries as the rate of interest on borrowings have increased across and not just confined to real estate. As far as ASL is concerned, as there is hardly any debt on the books, we are not under any pressure to serve huge interest as there is hardly any.

We heard that the company has initiated certain things that will reduce the labour cost in the construction industry, what is the innovation all about?

All concrete to be done with weight batcher & pumps for better quality & minimum. Labour use. We have also adopted TABLA Technology from Canada to minimize the carpentry work

How do you see demand in residential and commercial segments?

There has been a slowdown in demand for the commercial space since the crisis of 2008. However, with the growing economy the demand will pick up. Also, as very few Commercial projects have been launched since 2008, the demand may slowly start outstripping supply over a period of time. As far as residential segment is concerned, there is huge potential demand. Once, the interest rates will stabilize and start drifting southwards, the sales will start picking up in the residential segment.

Given the hike in rates by RBI fuelled by rising inflation, Do you expect rate hike in the coming months?

RBI may hike rates max by 25-50 bps till March 2012. Thereafter the rates should start coming down as inflation would have come under control resulting from the measures of continuous rate hikes done by RBI over the last year and also because of softening of the Oil and commodity prices because of the slowdown in US and European nations.

Give us an outlook of the real estate industry?

As per Eleventh Five Year Plan (2007-12) there is a Shortage of 26.53 million houses which provides big investment opportunity for the industry. Also with the rise in the purchasing power in the hands of the middle and lower income group, which forms major proportion of our population, the demand is going to remain robust.

Could you briefly, tell us about your current as well as upcoming projects?

Today we have 11 projects on going. There are few more projects lined up having a total Constructible area of approx. 7.43 million sq.ft. across Navi - Mumbai and Mumbai-Thane region in Maharashtra and Jodhpur in Rajasthan.