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A project every quarter

Prasoon-Chauhan

There’s a huge demand for affordable
housing, says HomeKraft CEO Chauhan

Prasoon-ChauhanEnthused with the roaring response to its first project ‘Happy Trails’, HomeKraft, the affordable and mid-income housing arm of the ATS Group, has ambitious plans to launch a project every quarter for the next few quarters. Prasoon Chauhan, CEO of HomeKraft, told Realty & More Editor Palash Roy in, perhaps, his first detailed interview that there is nothing unusual about it as each project has different financials, different construction team, different sales team and a different project manager. So for him, actually every project is a different unit altogether. A banking veteran with over 12 years of project financing experience in two private sector banks, Chauhan is also confident of delivering these projects on time because he says the parent company ATS has been delivering on time for the last 30 years. “I don’t see any reason for not delivering HomeKraft projects on time”, emphasised Chauhan.

The following is the text of the interview: 

Palash Roy: How has been the initial response to Happy Trails?

Prasoon Chauhan: The initial response is very good. Even though we are only taking Expression of Interest; we have already got over 200 of these within 7-10 days of launch. This is actually because our parent company ATS is known for its quality, amenities and project delivery. Keeping that in mind, we are getting a very good overall response for Happy Trail.

PR: Does the Expression of Interest mean booking amount received?

PC: Right now what we are doing is we are charging only Rs 50,000 as a token of interest and Rs 1.50 lakh we are taking as cheque. The Rs 50k is getting deposited in bank and the buyer has to fill up an EoI form. The EoI essentially has two-three things: which floor he/she is looking for or what kind of apartment he/she is looking for. On the basis of the entire response, we will summarise everything and allot the units.

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PR: So those who are booking right now are not getting any choices?

PC: They can fill up the choices, they are getting priority numbers. Those who come early are getting early priority numbers. Later on we will call them on the basis of priority number and allot a home on that basis.

PR: As only the Phase-I is launched right now, how long will it take to complete it?

PC: Actually, the overall project will be completed within four years.

PR: But won’t you be giving Phase-wise possession?

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PC: Actually, we are getting a very good response. We have launched just 450 units in Phase-I and we believe these will be sold out within two-three months only. By July, we expect to launch Phase-2, so it is not a very big difference. Therefore, we are planning to deliver the overall project within four years.

PR: What is the current price at which you have launched?

PC: We are not disclosing the current price right now and we are only telling them the price range. So typically, for 1,155 sqft the price is somewhere between Rs 45-50 lakh all inclusive other than the GST.  The 1,385 sqft ranges between Rs 55-60 lakh and the 1,625 sqft is between Rs 65 and Rs 5 lakh.

PR: Does this include all the charges?

PC: Yes, this includes everything other than GST & registration charges. This includes things like club membership, power backup, meter charges, security deposit and all other amenities. Even the lease rent payable to Noida Authority is included.

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  • The EoI essentially has two-three things: which floor he/she is looking for or what kind of apartment he/she is looking for. On the basis of the entire response, we will summarise everything and allot the units.
  • We have launched just 450 units in Phase-I and we believe these will be sold out within two-three months only. By July, we expect to launch Phase-2, so it is not a very big difference.
  • Each quarter we will be launching a new project. We will be launching the next project by October, another by December, and probably by Q1 of next year we will be launching yet another project.
  • In totality we will deploy roughly Rs 500 crore for the first project which includes debt, customer advances, promoter equity and internal accruals. So, all these put together, Rs 500 crore will be deployed in this project.
  • It’s not a complete change from one industry to another because if you are a banker and you are lending to a real estate company, you know the financials, you know how they are selling, and you get an idea how they operate.
  • Our focus is to deliver quality product at reasonable price. There is a really huge demand for affordable housing and a huge gap between demand and supply.
  • Whenever a new law comes it takes some time to settle down. The first year (of RERA) has been a bit slow but I am hoping now things will pace up.

PR: What are your plans after this because as you said it seems like you will be selling this project within six months?

PC: We are coming up with five projects which are all tied up. Each quarter we will be launching a new project. We will be launching the next project by October, another by December, and probably by Q1 of next year we will be launching yet another project.

PR: Don’t you think you are being too aggressive?

PC: No, I don’t think so because all the projects are in different locations. One project we have launched In Greater Noida West, one is in Noida, the third project we will be launching in Indirapuram and then we will launch in Gurugram. No project will compete with another. Every project will cater to a very different demand, very different segment.

PR: But don’t you think launching one project every quarter in such market situation is very ambitious?

PC: See there are two-three factors like financial discipline, timely project deliveries and good quality. I don’t think demand is an issue.

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PR: So, do you think you will be able to deliver on time?

PC: Of course! For the last 30 years we have been delivering on time. So, I don’t see any reason for not delivering HomeKraft projects on time.

PR: But four projects in a year!!!

PC: Every project has different financials, different construction team, different sales team and a different project manager. So, actually every project is a different unit altogether.

PR: How much fund have you raised for your first project?

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PC: As of now, for the first project we have raised construction finance from a leading construction finance company. In totality we will deploy roughly Rs 500 crore for the first project which includes debt, customer advances, promoter equity and internal accruals. So, all these put together, Rs 500 crore will be deployed in this project.

PR: As you come from a totally different environment, i.e. banking industry, how do you find this switch to real estate? Since both are too different; banking is an organised sector with strict guidelines whereas real estate till recently has been unregulated and unorganised.

PC: First of all let me tell you in banks I was taking care of the real estate division. First in ICICI Bank, then 10 years in Yes Bank, I was heading real estate. So it’s not a complete change from one industry to another because if you are a banker and you are lending to a real estate company, you know the financials, you know how they are selling, and you get an idea how they operate. Maybe not totally, but I had a fairly good idea about the real estate sector.

Secondly, I am very passionate about delivering good houses at reasonable prices. I saw a very huge opportunity in this segment as the players, especially in the affordable housing category there wasn’t much focus on good quality. Customers are getting sub-standard quality in this segment. So our main focus is to deliver quality product at reasonable price. There is a really huge demand for affordable housing and a huge gap between demand and supply. I know Mr. Anand from a very long time. One day we were discussing about it and he said why don’t we join hands and start working on it. That’s how I switched from banking.

PR: RERA has completed a year of its implementation. Has it brought any change in the industry?

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PC: Obviously! RERA has bought transparency as now you have to disclose your title deeds, carpet area, kind of unit, building plan and much more. So, definitely, it has given transparency to the industry. Whenever a new law comes it takes some time to settle down. The first year has been a bit slow but I am hoping now things will pace up.

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