Signature Global on their plans for the Rs 10 billion IPO
Real Estate

Signature Global on their plans for the Rs 10 billion IPO

Delhi-NCR based Signature Global focusses on affordable and mid segment housing (LIG and MIG) in terms of unit supplied (in the below Rs80 lakh price category) between 2019 and 2021 with a market share of 19 per cent. With a Rs 10 billion IPO filing, the company is en route to major expansion plans....
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Delhi-NCR based Signature Global focusses on affordable and mid segment housing (LIG and MIG) in terms of unit supplied (in the below Rs80 lakh price category) between 2019 and 2021 with a market share of 19 per cent. With a Rs 10 billion IPO filing, the company is en route to major expansion plans. Pradeep Kumar Aggarwal, Chairman and Whole Time Director, Signature Global, shares more on the company’s quick turnaround times, providing value homes and, integrated real estate development model and more with CW. Tell us about your plans to utilise the amount raised from the IPO. We plan to raise funds through an IPO of equity share capital (face value of Rs 1 /- each) aggregating up to Rs 10 billion.The offer comprises of fresh issue of equity shares aggregating up to Rs 7.5 billion and offer for sale of equity shares aggregating up to Rs 2.5 billion. The company proposes to utilise the net proceeds towards funding of the following objects: Re-payment or pre-payment, in full or in part, of certain borrowings availed by our company; Infusion of funds in some of our subsidiaries, namely Signature Global Homes, Signature Infrabuild, Signature Global Developers and Sternal Buildcon for re-payment or pre-payment, in full or in part, of certain borrowings availed by our subsidiaries; and Inorganic growth through land acquisitions and general corporate purposes.What opportunities has the Housing for All initiative and the Delhi Government’s focus on affordable housing brought for the company? We have strategically focused on the Centre and state governments policies supporting affordable housing, specifically the Affordable Housing Policy, 2013 notified by the Town and Country Planning Department, Government of Haryana (AHP) and the Affordable Plotted Housing Policy or the Deen Dayal Jan Awas Yojana (DDJAY - APHP). Compared to Haryana Residential Plotted Colony Policy (“HRPCP”), the DDJAY - APHP offers advantages in terms of low external development charges, in addition to lower minimum land area to apply for a project license. A higher portion of the licensed area can be developed under DDJAY – APHP. The DDJAY – APHP also has a higher Floor Area Ratio (FAR). According to an Anarock Report, the size of plots granted under DDJAY - APHP is smaller, while the permissible population density is higher under DDJAY – APHP. The smaller size of plots, along with the higher permissible density, allows for multiple smaller units to be constructed under DDJAY - APHP, allowing us to benefit from the economies of scale. Similarly, greater ground coverage leading to higher developable area, lower government charges and higher density under the DDJAY - APHP compared with that for a residential plotted colony are key factors that enable us to offer our projects to customers at compelling prices. Under the DDJAY – APHP, developers construct low-rise independent floors in the form of group housing projects, wherein individual floors can be sold, which is otherwise not permitted for similar small floor sizes in Gurugram and elsewhere. Most of our completed projects, ongoing projects and forthcoming projects are located in Gurugram and Sohna in Haryana, with 84.58 per cent of our Saleable Area located in this region, and almost all of our projects have been, or are being, undertaken under the AHP or the DDJAY - APHP. The company is well-known for its quick turnarounds in project completion. How do you achieve the same? We have adopted a disciplined approach for land acquisition and development and acquire land only on the basis of requirements. We endeavour to achieve a quick turnaround from acquisition to launch and have typically launched projects within a period of 18 months from the date of land acquisition. We place significant emphasis on cost management and monitor our ongoing projects to ensure that they are completed within committed timelines and budgeted amounts. Between fiscal 2017 and 2022, we have been able to deliver projects within an average period of 4.5 years despite delays on account of the COVID-19 pandemic and construction bans imposed by the National Green Tribunal from time to time to curb pollution levels in Delhi NCR. Our project management, technology initiatives and automation as well as implementation and monitoring capabilities have resulted in us delivering projects ahead of the stipulated delivery time. To deliver our projects on time and reduce our construction costs, we employ the aluminium formwork technology in most of our projects. The significantly reduces our construction time and results in strong and high-quality structures. Our turnaround capabilities have enabled our land resources to generate cash flows in a relatively short period following acquisition to support further developments. How do you provide ‘value homes’ with attractive designs and amenities? Our ‘value homes’ provide better living standards supported by comprehensive community facilities.We proactively seek to enhance the value of our projects by creating a better living environment through the provision of comprehensive community facilities and by engaging renowned architects. We have provided strategically-located, distinctive-design projects with an array of amenities, all at affordable prices. Our projects under the AHP, typically priced below Rs 3million per unit, includes amenities such as recreational areas, gardens, open spaces and community halls. Our projects under the DDJAY - APHP, typically priced between Rs 4million and Rs 8million per unit, provide facilities including gymnasiums, recreational spaces, entertainment centres, swimming pools and sporting facilities. All our AHP and DDJAY - APHP projects have a retail component within them, which are intended to offer further convenience to residents, and these components have the effect of increasing the value of our projects owing to the absence of price ceilings. Tell us about the integrated real estate development model adopted by the company. We have adopted this model, with capabilities and resources to carry a project from conceptualisation to completion. We have developed extensive in-house capabilities right from identification of land, conceptualisation of the project, to execution of the project involving planning, obtaining regulatory approvals, designing, supervising construction, marketing and sales, and culminating in delivery of the project.Our expertise across several processes including a centralised raw material procurement system has resulted in cost efficiencies for our operations and has helped deliver our offerings at competitive price. What is the emphasis laid on sustainability and building green? We have implemented environmentally-friendly building concepts in many of our projects and aim to increase the green cover in our developments to minimise our net carbon impact. We are an EDGE certifiedgreen building developer in Delhi NCR, for whicha developer should demonstrate a minimum projected reduction of 20 per cent in energy use and water use, among other requirements, as benchmarked against a standard local building. EDGE certification obtained by our completed projects and ongoing projects from IFC, an arm of World Bank, demonstrates our achievement in the areas of energy savings, water savings and sustainable materials. Further, we are a member of the Indian Green Building Council, andsome of our completedand ongoing projects have been certified by IGBC for designing and building high-performance buildings in accordance with IGBC Green Affordable Housing Rating System.As of March 31, 2022, most of our projects launched between fiscal 2020 and 2022 are either EDGE or IGBC certified. Tell us about your focus on labour skilling and ensuring safety on construction sites. It is imperative and we are committed to complying with applicable health, safety and environmental regulations and other requirements in our business operations. Our operations are also subject to inspections by the government officials with regard to various environmental issues. To help ensure effective implementation of our safety policies and practices, we identify potential material hazards, evaluate all material risks and institute, implement and monitor appropriate risk mitigation measures prior to commencement of the projects. We endeavour to achieve no accidents at our project sites through employment of internal safety professionals and adherence to our internal policy in this regard. We believe that accidents and occupational health hazards can be significantly reduced through systematic analysis, risks control mechanisms and training of management, employees, contractors and the labour force. We regularly organise labour skilling camps at our sites. Any plans to expand beyond the Delhi-NCR region? We intend to selectively expand in micro-markets within Delhi NCR. We may also consider acquiring land parcels in and around Delhi-NCR, in areas such as Manesar, which have good connectivity and display significant growth potential owing to factors such as government investment in infrastructure and employment. We believe that our continued focus on these markets will enable us to derive efficiencies of scale. In addition, we may also evaluate attractive growth opportunities in various other micro markets on a case-to-case basis. What growth does the company envisage in the near future? According to an Anarock Report, the absorption level in Delhi NCR in the affordable and mid segment cumulatively for the last five years stood at 158,916 units, while supply stood at 99,534 units. This suggests a sustained demand in this category. We believe that the short supply of affordable housing projects, particularly in our focus markets, provides significant opportunity to further grow our market share. As of March 31, 2022, we had 27 ongoing projects with a land area of 218.93 acres and an aggregate saleable area of 16.10 million sq ft and 27 forthcoming projects with a land area of 375.91 acre and an aggregate estimated saleable area of 19.72 million sq ft. As part of our ongoing projects, we have additionally received occupation certificates for 987,254 sq ft of saleable area and 547,040 sq ft of developable area. Of the total portfolio of 27 ongoing projects and 27 forthcoming projects, 41 of which are in the affordable and mid segment housing category under the AHP and DDJAY - APHP, aggregating to 26.65 million sq ft. We have a pipeline of forthcoming projects in the Sohna and Dwarka Expressway region with an estimated saleable area of 10.46 million sq ft. We intend to focus on markets within Gurugram such as Sohna both in the affordable and mid segments, where we have established a strong presence and reputation. As part of our forthcoming projects, we are also developing certain projects outside the AHP and DDJAY - APHP, such as retail spaces, residential spaces under the HGHP, industrial spaces under the Enterprise Promotion Policy (EPP), and Shop Cum Office (SCO) units under the Commercial Plotted Policy. As of March 31, 2022, the value of inventory of such areas based on the last sold price of the respective project, stood at Rs 18,186.19 million. Year of establishment: March 28, 2000 Areas of Operations: Affordable and mid segment housing Top Management: Pradeep Kumar Aggarwal, Chairman and Whole Time Director; Lalit Kumar Aggarwal, Vice Chairman and Whole-time Director; Ravi Aggarwal, Managing Director; Devender Aggarwal, Joint Managing Director and Whole-time Director;MeghrajBothra, Company Secretary; Manish Garg,CFO;Rajat Kathuri, CEO; and Sanjay Kumar Varshney, COO No. of employees: 803 Ongoing projects: 27 projects, land area of 218.93 acre, aggregate saleable area of 16.10 million sq ft Upcoming Projects: 27 projects, land area of 375.91 acre, and an aggregate estimated saleable area of 19.72 million sq ft Orderbook: Ongoing projects: 0.55 million sq ft, comprising 6,282 residential units and 566 commercial units, for which we have received occupation certificates (The above data has been provided as on March 31, 2022)

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