For Sales Inquiries Call Now :
+91 22 6230 2222
Leaders Speaks

Arihant Superstructures Ltd. Ashok Chhajer 

Ashok Chhajer

Chairman and Managing Director, Arihant Superstructures Ltd.

Looking At 3 Digit Growth

How did you start this business?

Earlier we were funding most of the developers in the region of New Mumbai and this is how in 1994 we ventured our own real estate company in the name of Chhajer Group.

What is your core business?

Today also we have the business of Textiles as well as Edible Oil. We have offices in Tripur, Ichalkaranjee, Erode and Mumbai and edible oil business is taken care at Jodhpur.

What are the unique strengths of your company?

We are more focused on the product line that we design and cater and we have our forte of entering into virgin markets and launching our real product there which could suit to the people who are not able to afford or buy in the premium places.

How is the current working and projects in hand?

Today, right now 11 projects are under construction in different stages from the verge of possession to the foundation stage. We have projects coming up at Badlapur, Vashi, Kharghar, Taloja and Panvel. Two projects are coming up in Jodhpur.

Are you into residential and commercial construction?

We are totally into residential construction.

When you expect these projects to be completed?

Today also on an average we deliver across 500 houses in a year. So in the pipeline in this financial year and the projects which are ongoing we see the possession date somewhere around June 2012.

For company's balance sheet purposes how do you take completion status into accounting?

We take the computation of income with respect to the total construction carried out rather than just going into the completion stage; we are computing our income on progressive method base.

How much money has been given to the subsidiary company?

Rs. 19 crores have been given to the subsidiary company Arihant Abode Ltd. and Arihant Vatika has been given another Rs.2 crores.

What is the core business and strengths of subsidiary company?

In Arihant Abode, we have the flagship project "Arihant Akansha" which is a project with Government of Maharashtra and will construct around 3000 houses situated on 25 acres of land on a premium spot in Panvel. Land has been acquired and we expect the approval in six months from now and the project will take off in the year 2012-13. Arihant Vatika's project in Badlapur is nearing approvals in next two months and soon we are going to commence that project also.

What was the major attraction in investing in the subsidiary company?

We had structured ourselves de-risking in toto by taking up only one project so we got our associates and that is how the subsidiary has been formed. Arihant Superstructures Ltd. has 60% stake in the subsidiary.

What is the purpose of Rights Issue and its object?

As per the latest status the Rights issue has been approved by the board of directors and the merchant bankers are working on filing the draft letter of offer. The main object is to raise funds for the project Arihant Abhiman which is the first project of public-private partnership with the Government of Rajasthan for affordable housing at Jodhpur. This was awarded to Arihant in January' 11 catering to 1350 houses to be given to the Government of Rajasthan. First phase of 625 houses for which the construction cost will be around Rs.22 crores. Funds have to be raised by internal accruals or from the equity as after the completion of first phase of 625 houses - the balance of 625 acres of land will be handed over to us for our own saleable component. So the funds cannot be raised through construction finance or by the means of any other mortgages as the principal property is to be handed over with permissions from the Government only on delivery of 625 houses.

What steps you are taking to increase shareholders base?

We are just doing up the matching up of the constructions to be carried out and increasing the business base. In terms of increasing the shareholders base, we would be transparent enough to give them the best results as well as dividends and value for whatever they have invested in the company in the time to come across. We welcome them in all platforms to the office to each and every shareholder and we have our hands open for them.

Do you have any plans to enter the field of Housing Finance?


What is your competitive edge?

Our target groups of people are ranging from flat buyers who have a capex from Rs.20 lakhs to Rs.50 lakhs which is a budget for 2 bedroom hall kitchen for plush complexes. This segment people form 80% of the market. We find that we have 1 crore sq. ft. of construction to be carried out in the next five to six years which is giving company stability and consistency of the performance.

What would you like to say about quality standards?

We always believed in it. We have been giving video security system which is today also a product on high profile markets. We feel that by giving a better quality, a good finished product -it would not cost more than 5% to 7% increase in construction cost but this would give a very good product to the consumers in the longer run. This is what we have been known for. We have set standards. We have set the trends to give better quality - all along these years; right from when we started up the construction phase in 1999.

What are your views and forecast on real estate industry?

Real Estate Industry will drive the economy for at least the next one or two decades including infrastructure also and there is a good and rising demand on day to day basis in terms of housing and developers need to cater to all the segment of product line what they do. They need to see to it that at least that they also cater to lower income group housing as well as middle income group and higher income group.

What would you like to say about the strength of your team?

We are an organization of 300 persons which runs on processes and systems. We have scaled up our operations in terms of human resources as well as to meet the requirement of construction activity. We would be scaling by two to three fold in next two to three years. We welcome the human resources and the people who want to contribute or to be a part of Arihant Superstructures Ltd. in the coming years.

How did you get the idea and need for going public?

Well, the idea was to open up more platforms for the company as well as investors. The fund managers find it more comfortable to have exit level and the strategy is clear and transparent. And for investors it requires huge amount Rs.10 lakhs to Rs.50 lakhs and above to buy real estate directly whereas people who want to invest in real estate but have very less amount like Rs.10 thousands to Rs. 30 thousands; they can enter into the equity model of a real estate company where the results and returns would be equivalent to buying up a real estate.

What would you like to say about your brand?

We have positioned ourselves at a distinguished level where the industry, the vendors and the customers have identified ourselves as a company where there is comfort, business and transparency. We have always believed in brand and we take care of our brand in terms of mainly the product line and services to all our associates.

What is your revenue model?

We have been raising funds through internal accruals more. We always see to it that the project goes into auto pilot stage and at a faster pace as in real estate we get advances in the earlier stage of construction. Other than that; funds from promoters and group side. Thirdly we raise funds through banks and institutes. We have taken Rs.8 crores of disbursement from the bank for the project Arihant Abhilasha. We have Rs.50 crores of disbursement ready but have not taken it as we are seeing more opportunities to utilize the fund.

Roughly, what is the size of total loans and average rate of interest?

Today, approximately the external loans are to an extent of are Rs.10 crores and rate of interest is 15.25% to 15.50%.

How do you foresee your company three years from now?

In three years we would increase our market share by 50% over what is existing as on today and the revenues at least I would like to touch upon as 200% increase. We would like to be the most preferred developer to be in the regions of our operations.

Any other important point you may like to share?

We have believed into performances rather than stocks (prices). We see that if there is a bible of secured business and opportunities whereas we can cater to the industry as well as some diversification there will be good results for the stakeholders.

Enquire Now