Hemant Shah, Chairman, Ackruti City Ltd
Ackruti City Ltd has many prime Mumbai-based commercial projects to its credit and diversified interests across several verticals. Little wonder then, that Chairman Hemant Shah is upbeat about the company’s future. The son of a Hindi film producer, he forayed into the construction business after bagging his civil engineering degree and eventually expanded into the real-estate business along with his brother. This Forbes-listed (among India’s richest) man tells Jayanthi Narayan what makes him - and his company - tick. Excerpts….
How do you plan to keep pace with the booming realty market? Keeping pace means launching more works and selling. We already have plans ready for the next five years. We do not work on a day-to-day basis. We have our land bank, materials, plant and works in place. Today’s realty is more residential, so we have more projects in it. At the same time we also have other types of projects: commercial, specialised projects like IT parks, textile parks, development of PPP projects, and infrastructure projects like the redevelopment of the existing bus depots in Gujarat. We are also developing a 700-acre Biotech Park in Baroda.
How much do you think the industry will grow?The whole of India will have to be redeveloped. That’s why Obama comes here and asks for jobs. First cities like Mumbai will be completely rejuvenated in the coming decades. Every inch will be redeveloped. That’s where our major task lies. And then we come to the second cities like Pune, extended suburbs like Thane, central cities like Vadodara, Surat, Mehasana, Ahmedabad, and we start in Delhi, Bengaluru, etc. Our concentration is more on the western side of the country. The mid-income population already has the basics like roti, kapda aur makan. Now, it needs good homes. So there is a huge potential for real-estate developers.
Your profit is up 87 per cent. What is the secret behind this sterling performance?Our progress will now be compounded continuously. We have a very large number of projects that are now being put to development. Every project takes two years of planning. Our projects range from the costliest in the country to the affordable ones and also free housing projects. And when you are end to end, you continuously sell, whether the market is having a boom or not. I don’t see our bottom line being affected seriously, even if the market takes a reversal.
There is no great secret behind it, but the legacy of projects coming up is always continuously improving our performance. The whole execution is well planned. And we are very comfortable in execution mode because that is our forte. We are not a company who builds a land bank. We keep churning. We have a land bank of about 68 million sq ft. We have JV partners too.
Are you planning a pan-India presence?We are certainly planning to get into many more places. We have a project in Bengaluru and a JV in Delhi too. Our vision is broad but our execution is firmly grounded on the western side.
Will you have local issues to handle in other areas?I don’t see any challenges. Someone who can work in Mumbai can operate anywhere.
How do you keep abreast with the latest technology?At Ackruti we have a policy of continuous innovation and improvement. We have four international architects in the company. We were among the first to use RMC when people said it was too expensive. We were the first to get an ISO certificate and CRISIL rating. And we are the first to make a vertical car park of 20 floors at Breach Candy. Whether it is an automatic car parking system or a construction system, keeping abreast with the latest technology is a way of life at Ackruti.
Tell us about your dream project.For me every project is a dream pro-ject. A small project also has its own importance. Ackruti Gold at BKC is only 68,000 sq ft and we got a platinum rating for that.
You are involved in slum developments too….We promoted slum development in the city. We started in 1992, when we saw its first mention in development control rules. Above 12,000 houses have been given to slum dwellers and many more are under construction.
What impelled you to take it up?I went to a slum for the first time in 1992 and was shocked that people lived in such inhuman conditions. We decided this is one area to concentrate on; it would offer both recognition and rewards. It is a win-win situation. We get money, prestige, satisfaction. The slum dweller gets a house. The government does not spend anything and gets returns in terms of infrastructure development. And society gets a clean environment and healthier living.
What is the status of the Dharavi redevelopment?There are many challenges there because of rules, eligibility, dev-elopment changes and market changes. Everyone is working on it.
How eco-friendly are your projects?I am striving to make all my projects eco-friendly. We have been at the front of the green movement. Whether big or small, we aim to get our projects LEED certified. All new projects are 100 per cent green. We have 30 projects coming up in the next few months and all are green.
What is your turnover?Our income last year was Rs 614 crore.
Earlier, developers would give about 70-75 per cent of carpet area. Now that is shrinking. What is your view?Since 1985, in whatever small buildings we make, we always mention carpet area. For us, carpet areas have never shrunk or exceeded. We are one of the most transparent companies. Whatever we give, we show.
What about the ethics practised in the industry?I think we are all swayed by the Hindi film industry that shows builders as smugglers. Probably some people in the past were like that but it isn’t the same anymore. Education has made a lot of difference. In 2008, I finished my education at Harvard. We want to give the best. There will be people who want shortcuts in life but that happens in any industry. However, people like that can’t survive now. The world has become flat and people are very informed.
Give us a brief history of your company. Our family is from the film industry but we stopped making movies in 1970. I became a graduate engineer in 1977 and I worked for two years to gain experience to start the company. So the group started effectively from 1980. My brother joined me in 1986 after he became a chartered accountant. We own the company equally. It started from a very humble beginning with work of less than a lakh of rupees. And then we became one of the fastest growing contracting firms. In 1986 I did my first real-estate project and we entered slum redevelopment in 1992. We slowly branched out and went public in 2007.
What is your personal success mantra?“Khud hi ko kar buland itna ke teri har taqdeer likhne se pehle khuda tujhse pooche bata teri raza kya hai.” (Raise yourself to such a level that God himself asks you your wish before deciding your fate.) You must prove yourself continuously and make yourself capable.
Where do you see yourself in coming years?We want to be known as the most trustworthy company. We want to change the perception of people. There are always two ways to do the work: You work properly for 1,000 days and the rest will fall into place. Or you work your whole life yet you won’t achieve anything.
In terms of figures, where do you see yourself?Figures don’t interest me. I strive to achieve but don’t want to put any figures in my mind. I only want to do better than I did before. Figures are deceptive.
Establishment:1989Top management: Hemant Shah, Chairman, and Vimal Shah, Managing Director Centre of operation: MumbaiNo. of employees: 600Group turnover: Rs 618 crore (total income in FY 2009-10)
Projects to be launched
Residential: Rising City Phase I, Ackruti Ruby, Ackruti Neuvo, Ackruti Raro, Ackruti Realms, Ackruti Monte Metro, Ackruti Divinitii, Ackruti Siddhi, Ackruti Countrywoods Phase-IICommercial: Ackruti Sunstream - Ph I, GSRTC - Geeta Mandir, GSRTC - AdajanHotel, Residential & Service: Hindustan Mill