larsen & toubro outthink - 2016, iim rohtak final round

PLEASE USE SLIDE SHOW MODE

1

Taking into account demographic factors, economic growth, financial factors and availability of housing and office space, the recommendation to execute the project or to put it on hold has been given for each state

From the lenders point of view, risks ofthe real estate project have beenidentified based on past projects of L&TRealty, construction period and theproject life span

After identification of risks, they have been classified based on when they are likely to occur in the course of the project (pre,

during and post) and have been put under the headers of legal, labor, operational and maintenance risk

Each risk has been thoroughly assessed, with a detailed

explanation of mitigation, indicators, solutions and parties

involved along with the probable financial impact on the project

The correlation between various risks are found and these are used to identify the risk that would have maximum impact on the project. An integrated risk analysis is performed to assess the overall impact of the risks and the cash flow in case of worst case scenario is also calculated

A comprehensive pan India analysis of twenty states has been conducted including qualitative

and quantitative analysis like PESTLE, SWOT, Competitors analysis and analysis of all financial

factors to arrive at an NPV for each state

2Team: RadioActive

Maharashtra and Tamilnadu are the states with the highest urban population

It is to be noted that the urban population in southern India is higher than Northern India

Kerala, TN, Maharashtra, Gujarat and Haryana have the highest GDP per capita

The northern states have high agricultural dependence, and hence the low GDP per capita

The BIMARU states are still afflicted by poverty and lack of access to basic facilities

The coastal states of Maharashtra and Gujarat showcase high GDP growth

The northern states have shown insignificant growth, and the lack of human capital and technology is the reason for this

The recent state elections have resounded the strong support of the people to the National Democratic Alliance

A single majority ruling Alliance would ensure uniformity in policies, making trade and other related activities easier

INDIAN ECONOMY AT A GLANCE

3Team: RadioActive

4

PAN INDIA ANALYSIS

Click on the state to see theanalysis of the respective state.

Financial Risk

Legal Risk

Labor RiskOperational

Risk

Risk Correlation

Matrix

Maintenance Risk

Team: RadioActive

R

G M

RISK ANALYSIS

Click on the TAB to see the analysis

Conclusion

PAN INDIA ANALYSIS CITY ANALYSIS RISK ANALYSIS RECOMMENDATIONS

Team: RadioActive

ANDHRA PRADESH

5

PESTLE

Demographics and Economic Indicators Porter’s 5 forces

APPENDIX FOR ANDHRA PRADESH (Click Here)

SWOT

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $77 Billion

GSDP/Capita $1,500

Area (Km2) 1,60,205

Population 49,386,799

Literacy Rate 67.41 %

HDI 0.6165

Government Majority (TDP)

Growth Rate 10.5%Capital: Amaravati (present)

Andhra Pradesh is one of the fastest growing state and will becomedeveloped state by 2029. Increase in demand and increase incompetition has led to the following forces of real estate

4

2

32

4

Threats of newentrants

Buyer's Power

Supplier's PowerCompetition

Rivalry

Threats ofsubstitute

Demand Driver

Supply Driver

RANGE High Medium Low

Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel

Strength + Opportunities = 3.55Weakness + Threats = 2..35

S + O > W + TAs strength and opportunities overcome weaknessand threats , hence we should explore further

Strength + Opportunities

Weakn

ess + Threats

4.5

4

4.5

4.5

Foreign DirectInvestment

Lending patternsof banks/NBFCs

Gross DomesticCapital Formation

Govt. Schemes likePMGSY and IAY

4.5

4.5

44.5

4

1.5

Political

Economic

Sociological

Technological

Legal

Environmental

3.5

3

34.5

4

Urbanization

DemographicDividend

Middle IncomeGroup

Growth of servicessector

Growth of retailand SEZs

Back to Index


Team: RadioActive

ANDHRA PRADESH

6

City Selection Analysis Competitor Analysis

Financial Feasibility Analysis

APPENDIX FOR ANDHRA PRADESH

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APPENDIX FOR ANDHRA PRADESH (Click Here)

Recommendation

City Area (Km2) Population REOR

Vishakhapatnam 681.96 2,091,811 4

Vijaywada 61.88 1,476,931 4

Tirupati 27.44 287,035 3

Guntur 168.41 743,354 4

Satellite images shows percentage of availableland for construction in above mentioned city

AP vision documents suggests rapid growth inabove mentioned cities

REOR* ratings positive growth prospects in AP

REOR = Real Estate Opportunity Rating INDIABULLS is the major competitor in residential cum commercial segment

0

1

2

3

4

5

6

7

8

9

Price Quality CustomerService

Locality Amenities Possession ProductRange

L&T Realty ASC INDIABULLS M.V.V BUILDERS ARC ESTATES Others

0

50

100

150

200

250

300

350

400

450

-18

06

.50

04

05

-15

75

.77

74

96

-13

45

.05

45

87

-11

14

.33

16

79

-88

3.6

08

76

96

-65

2.8

85

86

07

-42

2.1

62

95

18

-19

1.4

40

04

28

39

.28

28

66

11

27

0.0

05

77

5

50

0.7

28

68

4

73

1.4

51

59

29

96

2.1

74

50

18

11

92

.89

74

11

14

23

.62

03

2

16

54

.34

32

29

18

85

.06

61

38

21

15

.78

90

46

23

46

.51

19

55

25

77

.23

48

64

28

07

.95

77

73

85% Occupancy

Monte Carlo Simulation by varying cost and revenues

Description Occupancy Cost factor Revenue factor NPV

Most Adverse 70% 1.15 0.85 -298

Adverse 75% 1.1 0.9 -115

Moderate Adverse 80% 1.05 0.95 70

Minimum Favorable 100% 0.95 1.05 469

-400

-200

0

200

400

Most Adverse Adverse Moderate Adverse MinimumFavourable

NP

V in

Rs.

Cro

rers

Cash Flow Comparision for Cases

AFFO Net present value for different scenarios

Heat Map of Prices of Major City23 Districts

Back to Index

By 2029, expected contribution in GSDPby service and industries will be near 90%.Hence, more opp. for real estate.

×Though builders have not increasedconstruction cost, the land price hassignificantly gone up and this has resultedin higher prices

Greenfield international airport isproposed near Bhogapuram and as aresult, State registration revenue hassignificantly increased.

RECOMMENDATION: EXECUTE


Team: RadioActive

BIHAR

7

PESTLE

Real Estate related Data Demand Drivers Porter’s 5 forces

Supply Drivers

APPENDIX FOR BIHAR (Click Here)

SWOT

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $60 Billion

GSDP/Capita $578

Area (Km2) 94,163



HDI 0.447

Government Coalition

Growth Rate 17.06%

Bihar is one of the fastest growing state but, high state has made itdifficult for government to find investment opportunities. TheState Government is setting up an Information Technology (IT) Cityat Rajgir in Nalanda district. This may be one of the forces

3

4

22

4


Buyer's Power

Supplier'sPower

CompetitionRivalry


Capital: Patna

Strength + Opportunities = 2.4Weakness + Threats = 4

S + O < W + TAs weakness and threats overcomes strength andopportunities , hence we should not explore further


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

3.5

4

4

3

3

2.5

Political

Economic

Sociological

Technological

Legal

Environmental

2

4

2.5

1

3.5

Urbanization

DemographicDividend

Middle IncomeGroup



2

3

2

2



Plan Outlay &Gross Domestic

Capital Formation


Back to Index


Team: RadioActive

BIHAR

8

Site Selection Analysis Competitor Analysis



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APPENDIX FOR BIHAR (Click Here)

Recommendation


Patna 234.96 2,046,652 3

Gaya 90.88 470,839 2

Bhagalpur 110 410,210 1

Muzaffarpur 160 393,724 1

REOR = Real Estate Opportunity Rating

Low GDP/Capita shows people will pay less.Land is used for agriculture mostly

Cheap labor and material cost can bebeneficial.

REOR* ratings-negative growth prospects inBihar.

0

2

4

6

8

10



L&T Realty Rukmani Buildtech Shravani Engicon

AGR Estates Badal Construction Others

Rukmani & Shravani are the major competitors in residential cum commercial segmentPatna is the target city, other cities prefer contractor based construction

0

50

100

150

200

250

300

350

400

-26

07

.13

23

61

-23

44

.61

62

4

-20

82

.10

01

19

-18

19

.58

39

98

-15

57

.06

78

77

-12

94

.55

17

56

-10

32

.03

56

35

-76

9.5

19

51

36

-50

7.0

03

39

25

-24

4.4

87

27

15

18

.02

88

49

61

28

0.5

44

97

07

54

3.0

61

09

18

80

5.5

77

21

28

10

68

.09

33

34

13

30

.60

94

55

15

93

.12

55

76

18

55

.64

16

97

21

18

.15

78

18

23

80

.67

39

39

26

43

.19

00

6

85% Occupancy


About 35% of the simulation has shown negative NPV


Most Adverse 70% 1.15 0.85 -245

Adverse 75% 1.1 0.9 -88


Minimum Favourable 100% 0.95 1.05 358


-400

-200

0

200

400


NP

V in

Rs.

Cro

rers


Back to Index

× The state government, through anotification issued in December 2012,banned the approval of maps for anymultistorey building over 11 metres heighttill the proposed building bylaws come intoeffect.

× Due to some policy problems, thedemand isn't converting into actualmarket.

× The concept of township not present inthe state due to lack of electricity andwater provided by the state

RECOMMENDATION: CANCEL


Team: RadioActive

GUJARAT

9

PESTLE

Real Estate related Data Porter’s 5 forces

APPENDIX FOR GUJARAT (Click Here)

SWOT

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $110 Billion

GSDP/Capita $1821

Area (Km2) 196,024


Literacy Rate 79.31%

HDI 0.522

Government Majority (BJP)

Growth Rate 8%

Gujrat is one of the fastest developing state. With lots of FDIs andfavorable government regulations, it is expected that GSDP percapita will increase. It will increase the disposable income of thepeople and hence competition among the companies will increase

3.5

4

4

3

3

2.5

Political

Economic

Sociological

Technological

Legal

Environmental

4

3

3

4

3


Buyer's Power

Supplier'sPower

CompetitionRivalry



Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Strength + Opportunities = 3.4Weakness + Threats = 2.8

S + O > W + TAs threats strength and opportunities overcomesweakness and, hence we should explore further

4

3

33

4

Urbanization

DemographicDividend

Middle IncomeGroup



Demand Drivers

5

4

4

4




CapitalFormation

Govt. Schemeslike PMGSY and

IAY

Supply Driver

Capital: Gandhinagar

Back to Index


Team: RadioActive

GUJARAT

10




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APPENDIX FOR GUJRAT (Click Here)

Recommendation


Ahmedabad 464 5,577,940 5

Surat 326.5 4,462,002 4

Vadodara 225 1,670,806 4

Rajkot 170 1,286,678 4

High GDP/Capita shows people have highdisposable income.

Good governance and friendly businessenvironment. Can charge higher price

REOR* ratings-positive growth prospects Heat Map of Prices of Major City

REOR = Real Estate Opportunity Rating33 Districts

0

2

4

6

8

10



L&T Realty Iscon Group Deep Group

Shree Sharanam Group Siddhi Developers Others

0

50

100

150

200

250

300

350

400

450

-10

05

.87

49

23

-85

6.1

49

62

12

-70

6.4

24

31

94

-55

6.6

99

01

76

-40

6.9

73

71

57

-25

7.2

48

41

39

-10

7.5

23

11

2

42

.20

21

89

79

19

1.9

27

49

16

34

1.6

52

79

35

49

1.3

78

09

53

64

1.1

03

39

71

79

0.8

28

69

9

94

0.5

54

00

08

10

90

.27

93

03

12

40

.00

46

04

13

89

.72

99

06

15

39

.45

52

08

16

89

.18

05

1

18

38

.90

58

12

19

88

.63

11

14

85% Occupancy



Most Adverse 70% 1.15 0.85 -354

Adverse 75% 1.1 0.9 -136



-400

-200

0

200

400

600

800

Most Adverse Adverse ModerateAdverse

MinimumFavourable

NP

V in

cro

res

NPV in crores

Back to Index

Iscon group is the major competitor in residential cum commercial segment

AFFO Net present value for different scenarios Being developed as India’s firstInternational Financial Service Centre,Gujarat International Finance Tech-City(GIFT) will revamp the real estate scenarioof Ahmedabad and Gandhinagar.

× Certain modifications are required in thesystem by AUDA, GUDA, and CityDevelopment Cells so that they can beinvestor friendly

× A recent study conducted byASSOCHAM, noted that outstandinginvestments attracted by the real estatesector in Gujarat have dropped 20 per cent



Team: RadioActive

HARYANA

11

PESTLE


APPENDIX FOR HARYANA (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $58 Billion

GSDP/Capita $2100

Area (Km2) 49,212



HDI 0.644

Government Majority

Growth Rate 6.5%Capital: Chandigarh


S + O ~ W + TAs weakness and threats is almost equal to strength andopportunities , hence we should not explore further

SWOTSupply Driver

Demand Drivers


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Haryana, the land of agricultural activities and pilgrimages, hasbeen witnessing a fast paced infrastructural development.Sudden boost in the real estate of Haryana has attracted severalmultinational companies to bring industrial revolution.

Back to Index

2

3

54

2


Buyer's Power


Rivalry


3

4.5

3

4

4

3

Political

Economic

Sociological

Technological

Legal

Environmental

3 2

43

3

Urbanization

DemographicDividend

Middle IncomeGroup

Growth ofservices sector


4

3

3

4




Capital Formation


IAY


Team: RadioActive

HARYANA

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APPENDIX FOR HARYANA (Click Here)

Recommendation


Faridabad 742 1,404,563 4

Gurgaon 732 901,968 5

Panipat 64 442,277 3

Ambala 62 407,934 3

High GDP/Capita shows people have highdisposable income and can spend more

Higher growth prospects due FDIs andeconomic growth

REOR* ratings-positive growth prospects inBihar.


Back to Index

0

2

4

6

8

10



L&T Realty DLF Mahindra Lifescape Sobha Limited Ansal Builwell Others

Cities in Haryana has very stiff competition and hence coming up with a right price andcorrect value proposition is a challenge

050

100150200250300350400450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy



Most Adverse 70% 1.15 0.85 -315

Adverse 75% 1.1 0.9 -122



-500

0

500

1000


MinimumFavourable

NP

V in

cro

res

Scenarios

NPV in crores



× Union water resources ministry hasasked Haryana to make districts ofGurgaon, Faridabad, Mewat, Rewari andMahendragarh — to be a no constructionzone as it is an important groundwaterrecharge zone of NCR.

×The decision by the Government toimpose value added tax (VAT) ondevelopers operating in the state ofHaryana is likely to push the overall pricingof developed units higher.



Team: RadioActive

JHARKHAND

13

PESTLE


APPENDIX FOR JHARKHAND (Click Here)

SWOT

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $26 Billion

GSDP/Capita $780

Area (Km2) 79,714



HDI 0.376

Government Majority

Growth Rate 6.06%


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

It has some of the most industrialized cities like Jamshedpur,Bokaro and Ranchi that have been attracting people fromvarious states, thus providing a platform for the real estateindustry to thrive on the migrant population.Capital: Ranchi

Back to Index

Demand Drivers

Supply Driver Strength + Opportunities = 2.4

Weakness + Threats = 3.2S + O < W + T

As weakness and threats overcomes strength andopportunities , hence we should not explore further

3

4

33

4


Buyer's Power

Supplier'sPower

CompetitionRivalry


4

4

2

3

3

4

Political

Economic

Sociological

Technological

Legal

Environmental

3

4

33

4

Urbanization

DemographicDividend

Middle IncomeGroup



3

3

4

4


Lending patterns ofbanks/NBFCs

Plan Outlay & GrossDomestic Capital

Formation



Team: RadioActive

JHARKHAND

14




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APPENDIX FOR JHARKHAND (Click Here)

Recommendation

24 Districts

Back to Index


Jamshedpur 742 1,337,131 3

Dhanbad 732 1,195,298 2

Ranchi 64 1,112,677 2

Bokaro 62 563,417 3

Heat Map of Prices of Major City

Low GDP/Capita shows people have lowdisposable income and will spend less


REOR* ratings-positive growth prospects inJharkhand


0

2

4

6

8

10


Locality Amenities Possession Product Range

L&T Realty S K Construction Rameshwaram Projects Vasundhra Homes J D Infra Others

Cities in Jharkhand has very stiff competition and hence coming up with a right price andcorrect value proposition is a challenge

0

50

100

150

200250

300

350

400

450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy


Case Description Occupancy Cost factor Revenue factor NPV

1a Most Adverse 70% 1.15 0.85 -343

1b Adverse 75% 1.1 0.9 -128

1c Moderate Adverse 80% 1.05 0.95 74

1d Minimum Favourable 100% 0.95 1.05 524

-500

0

500

1000


NP

V in

cro

res

Scenarios

NPV in crores


× Rising costs of construction, higherinterest rates on housing loans, landacquisition problems had slowed down thepace of development for the last one year

× The Chotanagpur Tenancy Act (CNT) Actand the Santhal Pargana Tenancy (SPT) Actentail that tribal land cannot be bought bya non-tribal

There is steady rise in real estate activityon non-tribal patches in the areas .



Team: RadioActive

CHHATTISGARH

15

PESTLE


APPENDIX FOR CHHATTISGARH (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $27 Billion

GSDP/Capita $967

Area (Km2) 1,35,194


Literacy Rate 71 %

HDI 0.537

Government Majority (BJP)

Growth Rate 7.5%


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Tremendous growth in all the sectors has made this state thehottest choice of property investors.Capital: Raipur

Back to Index

Demand Drivers

Supply Driver



SWOT

3

4

32

3

Threats ofnew entrants

Buyer'sPower

Supplier'sPower

CompetitionRivalry


3.5

4

3

4

2

2

Political

Economic

Sociological

Technological

Legal

Environmental

2

3

2

3

3

Urbanization

DemographicDividend

Middle IncomeGroup



3.5

3

4

2




Formation



Team: RadioActive

CHHATTISGARH

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APPENDIX FOR CHHATTISGARH (Click Here)

Recommendation

27 Districts

Back to Index


Raipur 226 1,337,131 3

Durg 172 1,195,298 2

Bilaspur 345.8 1,112,677 2

Rajnandgaon 67 563,417 2

Medium GDP/Capita shows people have lessdisposable income and will spend less


REOR* ratings-positive growth prospects inChhattisgarh



0

2

4

6

8

10



L&T Realty GT Capital Homes Shreeji Wallfort Balaji Others

Tremendous opportunity for real estate because of rapid growth, new market hencecompetition is stiff. New value proposition is required. Skimming strategy is beneficial

0

50

100

150

200

250

300

350

400

450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy



1a Most Adverse 70% 1.15 0.85 -368

1b Adverse 75% 1.1 0.9 -122



-500

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1000


MinimumFavourable

NP

V in

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res

NPV in crores

AFFO Net present value for different scenarios Real estate in Chhattisgarh is expectedto develop rapidly in the next decade dueto formation of the new capital “NayaRaipur”.

Apart from the regular IndustrialEstates, large tracts of land have beenreserved and earmarked in variousdistricts for mega-projects.

The future of the hospitality segment isbright, as the state’s dense forests, caves,waterfalls, rich bio-diversity andhandicrafts have the potential to developinto popular tourist attractions.



Team: RadioActive

MADHYA PRADESH

17

PESTLE


APPENDIX FOR MADHYA PRADESH (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $75 Billion

GSDP/Capita $1036

Area (Km2) 308,245



HDI 0.375

Government Majority

Growth Rate 5.16%


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

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+ Th

reat

s

The potential of real estate in Madhya Pradesh is still notrealized by the property seekersCapital: Bhopal

Back to Index



SWOT

Demand Drivers

Supply Driver

4

4

3

4

4

3

Political

Economic

Sociological

Technological

Legal

Environmental

3

3

44

3

Urbanization

DemographicDividend

Middle IncomeGroup



3

3

4

3




CapitalFormation


IAY

3

3

4

3

2


Buyer's Power

Supplier'sPower

CompetitionRivalry



Team: RadioActive

MADHYA PRADESH

18




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APPENDIX FOR MADHYA PRADESH (Click Here)

Recommendation

57 Districts

Back to Index


Bhopal 226 1,883,381 3

Indore 172 2,167,447 4

Gwalior 345.8 1,267,564 3

Jabalpur 67 1,101,981 3

Medium GDP/Capita shows people have lessdisposable income and will spend less


REOR* ratings-positive growth prospects inMadhyaPradesh



0

2

4

6

8

10



L&T Realty Man Developers Deveshi Infrastructure

SkyeEarth Developers APPOLO DB group Others

Stiff competition among the players. Skimming strategy is required. Man Developers is themajor competitor in Indore

0

50

100

150

200

250

300

350

400

450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy


1a Most Adverse 70% 1.15 0.85 -325

1b Adverse 75% 1.1 0.9 -134



-500

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500

1000


MinimumFavourable

NP

V in

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res

Scenarios

NPV in crores

20 Years



With many manufacturing giants settingshop here, Madhya Pradesh capital Bhopalis in the middle of a realty development.Expecting the city population to go upsubstantially due to this, many buildershave flown to Bhopal. The city has as manyas 70 under-construction projects.

× An ASSOCHAM study said real estateinvestments in the sector in MadhyaPradesh (MP) have declined at acompounded annual growth rate (CAGR)of 29% in past four years.



Team: RadioActive

KERALA

19

PESTLE


APPENDIX FOR KERALA (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $59 Billion

GSDP/Capita $1767

Area (Km2) 38,863



HDI 0.790

Government Majority

Growth Rate 7.36%


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

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+ Th

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s

Kerala has rightly earned the sobriquet ‘God’s Own Country’ formany reasons but mainly on account of its natural lush greensettings and scenic landscape. The State has also attained aunique status on account of making it to the list of the top must-see global destinations

Capital: Thiruvananthapuram

Back to Index


S + O > W + TAs threats strength and opportunities overcomesweakness and, hence we should not explore further

SWOT

Demand Drivers

Supply Driver

2.5

4

4.5

3

4

3

Political

Economic

Sociological

Technological

Legal

Environmental

3

4.5

4

3

4

Urbanization

DemographicDividend

Middle IncomeGroup


Growth ofretail and SEZs

3.5

2

4

4




Formation


4

2

33

4


Buyer's Power

Supplier'sPower

CompetitionRivalry



Team: RadioActive

KERALA

20




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APPENDIX FOR KERALA (Click Here)

Recommendation

24 Districts

Back to Index


Thiruvananthapuram 216 957,730 3

Kochi 95 612,343 3

Kollam 58 349,033 3

Thrissur 101 325,474 3


High GDP/Capita shows people have moredisposable income and will spend more


REOR* ratings-positive growth prospects inKerala


0

2

4

6

8

10



L&T Realty Nest Infra ABAD Builders VINAYAKA HOMES INFRA HOUSING others

Stiff competition among the players. Skimming strategy is required. Nest is the majorcompetitor in Kochi

050

100150200250300350400450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy



1a Most Adverse 70% 1.15 0.85 -343

1b Adverse 75% 1.1 0.9 -141




-500

0

500

1000

Most Adverse Adverse Moderate Adverse Minimum FavourableNP

V in

cro

res

Scenarios

NPV in crores

The large scale tourism-enhancingactivities that are being undertaken inKerala have been attracting the attentionand interest of many real estatecompanies to invest in the State in orderto cater to the accommodation needs ofthe tourists on a larger scale.

Developments such as privatization ofthe international airport and upgradationof the sea port at Kochi have brightenedthe prospects of the real estate scene inthe city.



Team: RadioActive

KARNATAKA

21

PESTLE


APPENDIX FOR KARNATAKA (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $100 Billion

GSDP/Capita $1658

Area (Km2) 191791



HDI 0.508

Government Majority

Growth Rate 6.3%

Strength + Opportunities = 4Weakness + Threats = 2.1

S + O > W + TAs strength and opportunities overcomes weaknessand threats, hence we should not explore further

SWOT


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Demand Drivers

Supply Driver

Back to Index

Capital: Bengaluru

2.5

4

34.5

3

3

Political

Economic

Sociological

Technological

Legal

Environmental

4

2

44

4

Urbanization

DemographicDividend

Middle IncomeGroup



4.5

3

3

2




Capital Formation


IAY

4

3

44

2


Buyer's Power

Supplier's PowerCompetition Rivalry

Threats of substitute

One of the major reasons for the growing property market in thecity is its well developed infrastructure and basic amenities.Bangalore has a much improved transportation system.


Team: RadioActive

KARNATAKA

22




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APPENDIX FOR KARNATAKA (Click Here)

Recommendation

Back to Index


Bengaluru 539 8,520,435 4

Mysore 131 990,900 3

Mangalore 200 623,841 3

Belgaum 171 610,350 3

High GDP/Capita shows people have moredisposable income and will spend more


REOR* ratings-positive growth prospects inKarnataka



0

2

4

6

8

10



L&T Realty Vandana Infra PURAVANKARA PROJECTS

KONCEPT AMBIENCE BRIGADE ENTERPRISES Others

Stiff competition among the players. Skimming strategy is required. Due to highdependence on service sectors, competition is heathy

050

100150200250300350400450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy


1a Most Adverse 70% 1.15 0.85 -397

1b Adverse 75% 1.1 0.9 -163




-500

0

500

1000


V in

cro

res

Scenarios

NPV in crores


CREDAI to provide a platform forResource persons, including policy-makersand financial experts to discuss the state ofreal estate in the state

The state is witnessing a steep rise inprices as the demand for housing solutionsis increasing, and so is the interest of realestate builders to invest in this territory.

The overall picture of the real estatesector in the state constitutes a 5%increase in capital growth with a 14% hikein supply.



Team: RadioActive

RAJASTHAN

23

PESTLE


APPENDIX FOR RAJASTHAN (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $85 Billion

GSDP/Capita $1139

Area (Km2) 342,239


Literacy Rate 67 %

HDI 0.434

Government Majority

Growth Rate 5.4%



SWOT


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Demand Drivers

Supply Driver

Back to Index

2.5

3

23

3.5

4

Political

Economic

Sociological

Technological

Legal

Environmental

2

2.5

2.52

3

Urbanization

DemographicDividend

Middle IncomeGroup



Capital: Jaipur

2.5

2

3

4




Capital Formation


32

33

3


Buyer's Power


Threats of substitute

Rajasthan is the largest state of India and one of the richest incultural heritage. The property market in Rajasthan is flourishingso it is beneficial to invest in property here


Team: RadioActive

RAJASTHAN

24




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APPENDIX FOR RAJASTHAN (Click Here)

Recommendation

Back to Index


Jaipur 484 3,525,000 4

Jodhpur 79 1,320,000 3

Kota 527 1,200,000 4

Bikaner 155 700,000 2

Medium GDP/Capita shows people have moredisposable income and will spend more

Dependent on tourism and lack of servicesector

REOR* ratings-positive growth prospects inRajasthan



0

2

4

6

8

10



L&T Realty UNIQUE BUILDERS UDB UPASNA GROUP TRIMURTY GROUP OTHERS

Stiff competition among the players. Skimming strategy is required. New players arecoming with new value proposition

050

100150200250300350400450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy



1a Most Adverse 70% 1.15 0.85 -328

1b Adverse 75% 1.1 0.9 -135




-500

0

500

1000


V in

cro

res

Scenarios

NPV in crores

The immense business potential of thereal estate market of Rajasthan hasalready drawn large interests from someof the leading Indian real estatedevelopers who are entering thesemarkets to invest on cheaply availableproperties and make abundant profits.

The owner of property here does nothave to pay property tax

The establishment cost of setting up abusiness or residential property inRajasthan is very low as compared to othercities and states.



Team: RadioActive

UTTAR PRADESH

25

PESTLE


APPENDIX FOR UTTAR PRADESH (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $60 Billion

GSDP/Capita $578

Area (Km2) 94,163



HDI 0.447


Growth Rate 7.06%


S + O > W + TAs strength and opportunities overcomes weaknessand threats , hence we should not explore further

SWOT


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Demand Drivers

Supply Driver

Back to Index

3

2.5

2

3

3

2.5

Political

Economic

Sociological

Technological

Legal

Environmental

2

4

2.52

3.5

Urbanization

DemographicDividend

Middle IncomeGroup


Growth of retail andSEZs

2

4

3

3




Formation


4

3

43

3


Buyer's Power


Rivalry


Capital: Lucknow

Uttar Pradesh is one of the largest state of India. It has two ends,one very progressive end (near NCR) and other end which is notso progressive. Progressive end has huge growth potential forreal estate


Team: RadioActive

UTTAR PRADESH

26




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APPENDIX FOR UTTAR PRADESH (Click Here)

Recommendation

Back to Index


Kanpur 404 2,920,078 3

Lucknow 2522 2,904,474 4

Ghaziabad 132 2,358,525 4

Agra 70 1,746,467 2

Low GDP/Capita shows people have lessdisposable income and will spend less

Few Cities have good growth prospects REOR* ratings-positive growth prospects in

UttarPradesh

REOR = Real Estate Opportunity Rating 75 Districts


0

2

4

6

8

10


Locality Amenities Possession Product Range

L&T Realty Amrapali Group GAURSONS INDIA LTD

IMPERIA STRUCTURES MAHAGUN INDIA Others

Stiff competition among the players. Penetrating strategy is required. Difficult to enterwithout new value proposition

050

100150200250300350400450

-10

45

.83

18

73

-89

2.4

90

77

22

-73

9.1

49

67

19

-58

5.8

08

57

16

-43

2.4

67

47

13

-27

9.1

26

37

1

-12

5.7

85

27

07

27

.55

58

29

65

18

0.8

96

93

33

4.2

38

03

03

48

7.5

79

13

06

64

0.9

20

23

09

79

4.2

61

33

12

94

7.6

02

43

15

11

00

.94

35

32

12

54

.28

46

32

14

07

.62

57

32

15

60

.96

68

33

17

14

.30

79

33

18

67

.64

90

33

20

20

.99

01

34

85% Occupancy



1a Most Adverse 70% 1.15 0.85 -401

1b Adverse 75% 1.1 0.9 -165



-500

0

500

1000


V in

cro

res

Scenarios

NPV in crores

AFFO Net present value for different scenarios Appointment of regulator and appellatetribunal delayed to 2017, giving enoughtime to builders to complete their existingprojects, thereby benefiting buyers whoare awaiting the possession of theirproperties.

× Currently the availability of plots is low inLucknow as the Lucknow DevelopmentAuthority (LDA) and Uttar Pradesh Housingand Development Board have beendeveloping residential units.

× Low purchasing power of the people andrural population above 30% in the state.



Team: RadioActive

TELANGANA

27

PESTLE


APPENDIX FOR TELANGANA (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $60 Billion

GSDP/Capita $578

Area (Km2) 94,163



HDI 0.447


Growth Rate 5.06%



SWOT


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Demand Drivers

Supply Driver

Back to Index

4

3

44

2


Buyer's Power


Threats of substitute4

2

44

4

Urbanization

DemographicDividend

Middle IncomeGroup



4

4

3

4

4

3

Political

Economic

Sociological

Technological

Legal

Environmental3

3

4

4




Formation


As Telangana reached its one-year milestone, the real estatesector in Hyderabad appears to have given up hopes of a quickrecovery of fortunes and instead remains content with slow andincremental growthCapital: Hyderabad


Team: RadioActive

TELANGANA

28




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APPENDIX FOR TELANGANA (Click Here)

Recommendation

Back to Index

31 Districts


Hyderabad 650 8,746,490 4

Warangal 407 811,844 2

Nizamabad 43 311,152 4

Khamman 97 305,000 2



Telangana



0

2

4

6

8

10



L&T Realty Mahindra Lifescape SMR Holdings APARNA Aditya Construction Others


0

50

100

150

200

250

300

350

400

450

-11

09

.47

09

64

-94

9.8

24

32

16

-79

0.1

77

67

94

-63

0.5

31

03

72

-47

0.8

84

39

5

-31

1.2

37

75

28

-15

1.5

91

11

06

8.0

55

53

16

23

16

7.7

02

17

38

32

7.3

48

81

6

48

6.9

95

45

82

64

6.6

42

10

04

80

6.2

88

74

27

96

5.9

35

38

49

11

25

.58

20

27

12

85

.22

86

69

14

44

.87

53

11

16

04

.52

19

54

17

64

.16

85

96

19

23

.81

52

38

20

83

.46

18

8

85% Occupancy



1a Most Adverse 70% 1.15 0.85 -289

1b Adverse 75% 1.1 0.9 -119




-500

0

500

1000


NP

V in

cro

res

Scenarios

NPV in crores

Whenever Metro rail is going to beoperational, it will improve all marketsalong the metro sector and will increasethe demand for housing and office space.

× Despite a very marginal rise in the lastone year, property prices in and aroundthe city continue to remain very lesscompared to most other metro cities.Apart from all other attractions, a builderpoints out, the icing on the cake herehappens to be the low pricing.

× Banks in the state have been non-cooperative in the past when it comes tofunding real estate projects..



Team: RadioActive

TAMILNADU

29

PESTLE


APPENDIX FOR TAMILNADU (Click Here)

MA

CR

O-E

NV

IRO

NM

EN

T A

NA

LY

SIS

GSDP $60 Billion

GSDP/Capita $578

Area (Km2) 94,163



HDI 0.447


Growth Rate 7.06%

Strength + Opportunities = 2.4Weakness + Threats = 4


SWOT


Low 1 2 3

Medium 4 5 6

High 7 8 9

Execute Hold Cancel


We

akn

ess

+ Th

reat

s

Demand Drivers

Supply Driver

Back to Index

2.5

4

4.5

3

4

3

Political

Economic

Sociological

Technological

Legal

Environmental

2

3

2

3

3

Urbanization

DemographicDividend

Middle IncomeGroup



3

4

33

4


Buyer's Power

Supplier'sPower

CompetitionRivalry


4.5

3

3

2




Capital Formation


IAY

Capital: Chennai

Much developed social sectors along with essential infrastructural facilities have made Tamil Nadu more ideal for building residential real estate. The capital value of properties in Tamil Nadu is found to be escalating in some parts due to rising housing demands


Team: RadioActive

TAMILNADU

30




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APPENDIX FOR TAMILNADU (Click Here)

Recommendation

Back to Index

32 Districts


Chennai 404 4,320,078 3

Coimbatore 246 1,622,474 4

Maduri 242 1,461,525 4

Tiruchirappalli 96.9 2,746,467 2



Tamilnadu



0

2

4

6

8

10



L&T Realty Mahindra Lifescape SMR Holdings APARNA Aditya Construction Others


050

100150200250300350400450

-11

09

.47

09

64

-94

9.8

24

32

16

-79

0.1

77

67

94

-63

0.5

31

03

72

-47

0.8

84

39

5

-31

1.2

37

75

28

-15

1.5

91

11

06

8.0

55

53

16

23

16

7.7

02

17

38

32

7.3

48

81

6

48

6.9

95

45

82

64

6.6

42

10

04

80

6.2

88

74

27

96

5.9

35

38

49

11

25

.58

20

27

12

85

.22

86

69

14

44

.87

53

11

16

04

.52

19

54

17

64

.16

85

96

19

23

.81

52

38

20

83

.46

18

8

85% Occupancy



1a Most Adverse 70% 1.15 0.85 -397

1b Adverse 75% 1.1 0.9 -163




-500

0

500

1000


V in

cro

res

Scenarios

NPV in crores

Chennai is also a major beneficiary ofthe flooding e-commerce investments andthus the demand for office space willdrastically rise over the next few years

The state is renowned for contemporaryinfrastructural developments, effectiveeducational facilities and rapidindustrialization in the past decade

Velachery, in particular has seen a 40%rise in capital values on a year-on-yearbasis as improvements in infrastructureand the ongoing metro work will providebetter connectivity and prices arewitnessing an upward trend in this micromarket.RECOMMENDATION: EXECUTE


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31APPENDIX FOR ANDHRA PRADESHBack to Index

After analyzing all the major states, the shortlisted city for further construction is Bengaluru

4

3

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Buyer's Power



2.5

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34.5

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3

Political

Economic

Sociological

Technological

Legal

Environmental

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L&T Realty Vandana Infra PURAVANKARA PROJECTS

KONCEPT AMBIENCE BRIGADE ENTERPRISES Others

PORTER 5 FORCES

PESTLE

Competitor Analysis

PRICE INDICATOR

One of the major reasons for the growing property market in the city is its welldeveloped infrastructure and basic amenities. Bangalore has a much improvedtransportation system. Every part of the city is well connected with each otherthus very easily accessible. The city boasts of 24hour water and electricity supply.Apart from this, Bangalore is abundant with super markets, malls, multiplexes,specialty healthcare centers, educational institutes having a positive influence onthe real estate scenario of the market. With the numerous opportunities availablefor the investment, the city has attracted a huge number of investors from all overthe world. The investment in the properties of Bangalore is assured of offeringmaximum return due to its thriving real estate market.

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300

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MostAdverse

Adverse ModerateAdverse

MinimumFavourable

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Team: RadioActive

LEGAL RISK

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Procurement of NOCs (L1) NOC for construction / augmentation of residential pool accommodation is required from the

Directorate of Estate, Ministry of UD. CPWD also needs to obtain in principle approval from the Ministry of UD for GPRA and later on case is sent to the Technical Committee of local body for approval.

NOC is required for height clearance of Buildings / Structures/ Masts from the Directorate of Air Traffic Management, Airport Authority of India (AAI), when the project lies within 20 kms. radius of air strips/ funnel.

NOC from coastal zone management authority No Objection Certificate is required from MCZMA, when the land is near the coast as construction

is not allowed up to 500 meters from the high tide line. No Objection Certificate is required from the National Monument Authority

(NMA) / Archeological Survey of India (ASI), when the entire project site or part/s of it is within 300 meter radius from the declared boundary of any monument protected under Ancient Monument Act.

NOC is required from the Railway Authority/Mumbai Port Trust/Defencewhen the project site is along the railway corridor / within the jurisdiction of Mumbai Port Trust respectively.

NOC is required from the Road Owning Agency when cutting of footpath or road or service lane or Right of way (ROW) is involved.

Parties Concerned MCGM, PWD, NHAI, MCZMA, AAI, Ministry of UD, ASI, NMA, Railway Authority, Traffic & Coordination Dept. and the Mumbai Port Trust

Timeframe 6months-1 year to obtain all NOCs. Any delay would lead to higher costs.

Indicators Delay in inter dept transfer of documents for approval from multiple depts

Mitigation Timely submission of documents and to ensure the surveying is quickly done

Solutions To reduce the costs due to delay by postponement of inventory and labour

Expected Shortfall 3.81 Crores

Value at risk (95%) 1047.79 Crores

Parties Concerned Ministry of UD, MHCC, Fire Department, MEF, Tree Authority Committee and the Municipal Corporation

Timeframe An average of 227 days to complete 30+ regulatory approvals

Indicators Order to review plans if found incompatible with any of the regulations

Mitigation Ensure that the plan is made in accordance with all the regulations

Solutions Work to be initiated after all the approvals are obtained to reduce costs



Land Approvals (L2)

Land use plan approval required from local body and the State Ministry of UD, when the land use is shown as Govt. land in the Master plan/Zonal plan of Mumbai.

Approval for change in land use required from local body and the State Ministry of UD, when the land use shown in master plan / zonal plan (where the plot is located)/ land allotment letter is to be changed (as the same is not permitted / not compatible with master plan/ zonal plan).

Relaxation in respect of density/ ground coverage/ FAR/ setbacks/ height prescribed in byelaws is required from concerned local body and the Ministry of UD.

Approval is required from the Tree Authority Committee of Municipal Corporation when there is a proposal for tree cutting/ felling and transplantation at the site & protection of the rare species of tree.

Approval is required from the Maharastra Heritage Conservation Committee (MHCC) or Appropriate Authority when the project has any link/ relation with any listed heritage building and precincts (as notified by local Body from time to time) and within their compound.

Approval /Fire Safety Certificate is required from Chief Fire Officer (CFO) for the proposals at layout plan stage as stipulated in the local building bye laws and National Building Code (NBC).

ENVIRONMENT CLEARANCE IS REQUIRED FROM MINISTRY OF ENVIRONM-ENT AND FORESTS (MEF)/

µ = 6% σ = 1 % µ = 8.5% σ = 1.2 %

1025 1035 1045

NPV for L2

1045 1050 1055

NPV for L1

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FINANCIAL RISK

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Debt and Interest Rate Risk (F1)

Parties Concerned Reserve Bank of India, banks and other lending institutions

Timeframe Over the lifetime period of the project(20years)

Indicators Churn of tenants and correlating it with the current state of the economy

Mitigation To predict the future of the market accurately and raise debt accordingly

Solutions To employ a competent financial institution to quantify and measure the risk



Parties Concerned Reserve Bank of India, banks and other lending institutions

Timeframe This risk is inherent throughout the project lifetime period(20 years)

Indicators Returns on capital are much lower than what was anticipated

Mitigation To calculate cap rate not only based on the market, but also on tenant mix

Solutions To look at past projects and their cap rates and observe the actual inflows


Value at risk (95%) -2181.9 Crores

Capitalization Rate Risk (F2) Of all the financial assumptions in a pro forma, cap rate risk is the most extreme since it has a

dramatic effect on an asset’s exit value, and that is why it is included in this list. Prevailing cap rates for different asset classes move in ranges and are subject to supply and

demand for that particular asset class. A small movement in a cap rate percentage can have a substantial effect on the residual value of

an asset and, in turn, the profitability (or loss) on a particular transaction. When an investment opportunity is analyzed, attention is to be paid to the entry and exit cap

rates and the following questions must be addressed: 1) Is the entry cap rate attractive for this asset when compared to its competitive set 2) Is the assumed exit cap rate is defensible over the prescribed holding

period? Artificially adjusted interest rates (such as those set by the RBI) can

artificially impact cap rates. In other words, with no underlying changes to the real estate asset or inherent risk to the deal, a property’s cap rate can fluctuate by 0.5% - 1.0% due to the change in interest rate. While that may not seem like a lot, it can have a heavy impact on the property’s value.

In commercial real estate, not all asset types are created equal when it comes to perceived risk. Multifamily assets consistently have among the lowest cap rates within a market, because they are considered to provide lower risk relative to other asset types.

Placing debt on a project is a common practice but placing too much debt on it or having it mature at an inopportune time can imperil it, particularly in the event of a market downturn (see market risk below). Debt risks can lead to foreclosure. Foreclosure isn’t as much of a risk itself but the unfortunate outcome of the incurred risks of over leverage, debt maturity or a combination of both.

Over leverage: If a property loses too many tenants its net operating income can drop to the point that its debt coverage service ratio can fall below 1.0, which now places the asset into risk of defaulting on its mortgage. Prudent leverage on an asset can range anywhere from 0% to 80% depending on the asset strategy. If an asset is leveraged in excess of 80% of value then it should have a compelling justification for the use of that much leverage. Otherwise, it may be overleveraged.

Debt maturity risk: If a property’s debt matures in a down market or at point when its net operating income is compromised, as noted above, then the project may be unable to obtain a new loan in the same amount of the outstanding debt. If investors are unable to infuse the additional capital necessary to refinance the project then the asset is now in risk of mortgage default. Debt maturity was one of the major culprits of why projects were lost during the financial crisis.

A number of Indian real estate firms saw a sharp rise in debt between 2012 and 2014 due to aggressive expansion plans, some of which failed to take off because of a weak economy and delayed project clearances.

µ = 1 σ = 10 %µ = 1 σ = 10 %

-2340 -1840

NPV for F2

285 385

NPV for F1

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LABOUR RISK

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Wages and Productivity of the Workers (La1)

Despite being the second largest employer in the country, the construction sector as a whole faces manpower shortage. Further, the sector is heavily dependent on manual labour, faces longer time lines for construction completions, which results in supply getting deferred.

Worldwide, construction workers are three times more likely to be killed and twice as likely to be injured as workers in other occupations. The costs of these accidents are immense to the individual, to the employer and to society. They can amount to an appreciable proportion of the contract price.

In India it is estimated that up to 30 per cent of construction workers are women. They are integrated into the bottom end of the industry, as unskilled workers or head-load carriers. women are often employed as part of a family work unit, as the piece-rate system encourages workers to engage their wives and children to increase output, and in these circumstances women may work but may not(directly) receive any payment at all. Also, women are more likely to leave work midway due to health related issues, and thereby the construction work takes a set back.

Many labourers are forced to work 10 to 12-hour day, for six days /week, either because the rates of pay are so low or simply because they want to earn as much as possible while work is available. This is particularly the case of workers who have migrated from the countryside.

The on-site accommodation provided for workers is also rudimentary, with simple shacks with no running water or sanitation and poor ventilation.

Parties Concerned Contractual agencies, Department of Labour and the builder

Timeframe Over the construction period of 6 years for the project

Indicators Irregularity of workers, slow pace of work and more demands put by them

Mitigation Progress of work to be monitored using cctv and peptalk on fortnightly basis

Solutions Skill development, orientation programs, removal of piece wise wage system

Expected Shortfall 3.94 Crore


Parties Concerned Contractual agencies, Department of Labour and legal agencies

Timeframe Over the construction period of 6 years for the project

Indicators Complaints filed in the labour courts by contractors or in grievance cells

Mitigation To make redressal of complaints easier by means of an online system

Solutions To approach the contractor to go for arbitration rather than go to the court

Expected Shortfall 1.96 Crore

Value at risk (95%) 1076.5 Crore

Contractual Laws (La2)

Building and other construction workers’ (regulation of employment and conditions of service) act, 1996 & Rules OF 1998 (workers safety, health & Welfare measures including necessary amenities). Every building worker registered as a beneficiary under this Act shall be entitled to the benefits provided by the Board from its Fund under this Act. Any person aggrieved by an order made under section 8 may, within thirty days from the date on which the order is communicated to him, prefer an appeal to the appellate officer.

Building and other construction workers’ welfare cess act,1996 (Cess Payment on cost of construction for workers welfare). This law is to provide for the levy and collection of a cess on the cost of construction incurred by employers. The cess rate not exceeding two per cent, but not less than one per cent, of the cost of construction incurred by an employer

THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 (regulate employments of contract labours & provide necessary amenities)..

THE PAYMENT OF WAGES ACT, 1936 (payment of wage in time). Any sum required to be paid by an employer, under this chapter but not paid by him shall be recoverable as delayed wages under the provisions of the Act(Sec 4)

THE MINIMUM WAGES ACT, 1948 (minimum wage rate fixed by govt. to be paid)

EMPLOYEES’ STATE INSURANCE ACT 1948 (scheme of health insurance for workers in case of sickness & injury)

µ = 4% σ = 1 % µ = 2% σ = 0.5 %

1055 1065

NPV for La1

1074.4 1079.4

NPV for La2

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LABOUR RISK

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Strikes and Workers’ Union Power (La3)

The Government of Maharashtra has taken a decision to mandate payments to all labourers, including contract workers through cheque so that the full amount as stated on their pay record actually reaches them and the government is able to monitor the same.

Workers working as contract labourers under a contractor would directly register himself/herself with the respective State Contract Labour Board to help the Government on keeping a track on the number of workers employed in contract, formulating social security schemes and promoting effective implementation of the Act. The Board shall regulate social security benefits, regulate the employment of contract labourers and oversee functioning of the contract labour system in India. The Central and State Boards shall be governed by the three social partners i.e. Government, Employers and Workers representatives (Trade Unions).

Industrial Disputes Act, 1947 is an Act to make provision for the investigation and settlement of industrial disputes, and for certain other purposes. Where any employer discharges, dismisses, retrenches or terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.

Indian Trade Unions Act, 1926 governs formation of unions in the state.

Parties Concerned State Contract Labour Board, Contractors, Labourers and legal agencies

Timeframe Over the construction period of the project(6 years)

Indicators Labourers going on strike and union leaders pressing for demands to be met

Mitigation To hold weekly meetings with the union leaders to address grievances

Solutions To negotiate with the union leaders and to make sure an impasse is avoided



Examples

17 buyers filled three cases in NCDRC for fraudulent practices adopted by M/S MVL Limited intheir project MVL Coral, Bhiwadi, Rajasthan. he project was planned with five towers namelyAvenue-1,2,3,4 and 5. Out of 5 towers, only tower no. 5 has been constructed at site as perapproved layout plan. The numbering and layout plans of all other towers were changed forunprecedented gains by the builder. 3 complainants had booked in tower-5 and all others in othertowers. MVL Limited could not obtain mandatory occupancy certificate for the said project. Forall other complainants commission noted MVL Ltd. had changed its original plans and increasedthe number of floors, flooring area, ratio and density per acre. It has caused inordinate delay incompletion of said projects. It has changed zoning plans, usage pattern, super area, carpet areaand alteration of structures.

MVL Limited was directed to furnish the occupation certificate, within 9 months from date oforders, as agreed, otherwise, it will carry additional penalty in the sum ofRs.2,000/ per day for each of the complainants, after the expiry of said 9 months.

This is an example of legal risk and maintenance risk being exemplified and causing addnl. costs.

Nine labourers were killed and two more injured after the slab of an under-construction buildingcollapsed at Balewadi in Pune. A team of thirteen labourers were working on the 13th floor of anunder-construction building which was part of a housing complex known as Park Xpress, a projectby the Pride Purple construction group. Most hailed from the Eastern state of Bihar. He said thecontractors and the project owners were being investigated to ascertain who was responsible forthe tragedy and questions like whether or not the labourers were wearing safety harnesses whileworking at that height or why was a safety net not erected below to preclude casualties werebeing probed. It was also a case of “illicit construction” as the builders (Pride Purple) had violatednorms by constructing an additional storey (the 13th floor) as permission to build only 12 floors,plus the basement, was given.

This is an example of legal risk and rules and regulations were being flouted, labour risk as thelabourers were not adequately paid and operational risk(safety risk) as the labourers were madeto work on a high elevation without any safety gear or a safety net.

µ = 10% σ = 2 %

1010 1020 1030 1040

NPV for La3

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OPERATIONAL RISK

36

Safety Risk (O1)

The average Fatal Accident Frequency Rate (FAFR) in the Indian construction industries is 15.8 for 1000 employees as against 0.23 in the USA. Construction hazards are also rated as eight times more risky than those from manufacturing sector

A construction site is a cluttered workplace, having many types of hazards due to complexity of the work environment, coupled with involvement of unskilled, illiterate and mobile work force making it all the more difficult

45 per cent fatalities occur due to fall of persons, 12 per cent by fall of objects, 10 per cent hit and run by vehicle, 9 per cent by electrocution and 3.5 per cent by collapse of structure or wall

Parties Concerned Builders of the project, Labour Department and the labour unions

Timeframe Over the construction period of the project(6 years)

Indicators Collapse of structures, instances of accidents and equipment failure

Mitigation Have mock safety drills, one safety officer/1000 workers, provide headgear

Solutions To have medical services available on site, regular checking of the site



Parties Concerned Suppliers of material/equipment, buyers and the Electricity/Water Boards

Timeframe This risk is inherent throughout the project lifetime period(20 years)

Indicators Rise in material costs, rise in prices of electricity/water, less buyers/tenants

Mitigation To make a contingency fund to cover extra operational/material costs

Solutions To predict material and operational costs accurately for the project period


Value at risk (95%) 1051 Crores

Inventory and System Risk (O2) Fluctuating input cost is a risk inherent to the real estate business. Company operations are subject

to budget overruns due to a number of factors like increase in construction costs, repair and maintenance costs, sub-contracted service costs and labour costs. Increased operating expenses may affect profit margins as the prices of properties sold cannot be altered.

Real estate companies often use an enterprise resource planning systems for integrating its core activities like architecture, engineering, projects and costing. A breakdown of existing IT systems or a delay in implementation could disrupt the company’s ability to track, record and analyse the work in progress, or result in loss of valuable data.

Inventory in the sector has risen to 2.9 years in first half of 2015-16 (April-March) compared to 2.6 years in 2014-15 and 2.2 years in 2011-12, which is a concern especially in the current scenario when sales are falling. Revival of property demand would depend on a meaningful reduction in prices or a drastic improvement in economic growth resulting in positive customer sentiments. This is unlikely until FYE17.

Energy insecurity risks—including higher electricity/diesel prices and shortages—will likely affect major cities in all the focus countries as energy demand is expected to outpace production capacity and energy infrastructure. India faces the greatest price and shortage risks, considering the already existing—and worsening energy supply-demand gap.

•

µ = 5% σ = 2 % µ = 5% σ = 2 %

State wise fall accidents in India (2015) Fatal fall accidents in India (2001) 1043 1063

NPV for O1

1043 1063

NPV for O1

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MAINTENANCE RISK

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Health Standards (M1)

Parties Concerned MCGM, MMRDA, NMMC and the CGWA

Timeframe This could pose a risk over the lifetime of the project i.e. twenty years

Indicators Failure of equipment, weakening of parts of building, wearing off of paint

Mitigation To have comprehensive project reviews yearly/bi-yearly to assess damage

Solutions To have a fund for maintenance of the building and levy fees from tenants



Parties Concerned Municipal Corporation, legal bodies and the police department

Timeframe After construction(6 years) till lifetime of project (20 years)

Indicators Low occupancies, dissatisfaction of tenants with the services provided

Mitigation Diverse tenant mix where single tenant can own only ≤ 20% of property

Solutions Formation of a feedback and grievance redressal committee for tenants

Expected Shortfall 0.04 crore


Tenant Rates and Laws (M2)

Completion-cum-Occupancy Certificate is required from local body/ authority(MCGM/MMRDA/NMMC) before occupation of a building or part of a building for any purpose.The local body forwards the proposals to the various other concerned authorities (as mentionedat S.No. 8 – 21 and 23 & 24) in the city as required for issue of case specific approvals/ NOC beforegranting Completion-cum-Occupancy Certificate.

NOC is required from the Lift Inspector, before granting Completion-cum-Occupancy Certificate when lifts are installed in a building.

Potential that unexpected costs may arise due to the condition of the property itself. Aging assets tend to have more risk for unforeseen problems to surface, such as costly roof replacements or equipment failure.

The extent and type of after-sales / maintenance planned by the developer for the project needs to be evaluated. This is generally stipulated in the sale agreement and therefore a careful study of the sale agreement with regards to these aspects must be undertaken.

NOC is required from the Lift Inspector, before granting Completion -cum- Occupancy Certificate when lifts are installed in a building.

Permission is required from the Central Ground Water Authority (CGWA) to abstract ground water through any energized means i.e. fordigging / installation of a bore well water connection in the site fordrinking water

Assets that require individual customer service as an important part of executing a business plan (e.g. multifamily, senior housing, hospitality and storage) are highly dependent upon property management. In these scenarios, outstanding property management is critical as the day-to-day onsite operations of the asset will have a direct effect on its performance.

If a property has the risk of losing too many tenants its net operating income can drop to the point that its debt coverage service ratio can fall below 1.0, which now places the asset into risk of defaulting on its mortgage. Prudent leverage on an asset can range anywhere from 0% to 80% depending on the asset strategy. If an asset is leveraged in excess of 80% of value then it should have a compelling justification for the use of that much leverage. Otherwise, it may be overleveraged.

Rent roll quality refers to credit worthiness, stability and number of tenants. It questions if tenants of a particular property have staying power, or could the tenant go out of business, file bankruptcy or default on lease.

Single tenant vs. Multi-tenant . Single tenants can be 100% leased but if they default or vacate at expiration, your property is now 100% vacant but multi-tenant buildings are rarely 100% leased or 100% vacant.

Rollover risk refers to the remaining term left on leases at a property and it affects both single tenant and multi-tenant properties.

Demand and Supply Risk evaluates in terms of the existing supply and lease rentals for the different type of properties, the vacancies in the existing properties and disposable income of the consumers.

157 207

NPV for M1

µ = 17.5% σ = 2.5 % µ = 3.5% σ = 1.5 %

211 231

NPV for M2

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RISK CORRELATION MATRIX


Risk/Risk Legal Risk Labor Risk Operational Risk Maintenance risk Financial Risk

Codes L1 L2 La1 La2 La3 O1 O2 M1 M2 F1 F2

Lega

l Ris

k L1 - 0.8 0 0.2 0 0.2 0.2 0.2 0.2 0 0

L2 0.8 - 0 0.2 0 0 0 0.2 0.2 0 0

Lab

or

Ris

k

La1 0 0 - 0.8 0.8 0.6 0.4 0.4 0 0 0

La2 0.2 0.2 0.8 - 0.9 0.4 0.2 0.6 0 0 0

La3 0 0 0.8 0.9 - 0.8 0.2 0.8 0 0 0

Op

erat

ion

al R

isk

O1 0.2 0 0.6 0.4 0.8 - 0 0.8 0 0 0

O2 0.2 0 0.4 0.2 0.2 0 - 0.2 0 0 0

Mai

nte

nan

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risk

M1 0.2 0.2 0.4 0.6 0.8 0.8 0.2 - 0.6 0 0

M2 0.2 0.2 0 0 0 0 0 0.6 - 0.6 0.6

Fin

anci

al R

isk

F1 0 0 0 0 0 0 0 0 0.6 - 0.8

F2 0 0 0 0 0 0 0 0 0.6 0.8 -

Legend

L1 Procurement of NOCs

L2 Land Approvals

La1 Wages and Productivity of the Workers

La2 Contractual Laws

La3 Strikes and Workers’ Union Power

O1 Safety Risk

O2 Inventory and System Risk

M1 Health Standards

M2 Tenant Rates and Laws

F1 Debt and Interest Rate Risk

F2 Capitalization Rate Risk

• The correlationbetween various risksare calculated in orderto determine thecumulative effect ofthe risks if they occurtogether.

• It is seen that thehealth standards riskhas the maximumcorrelation with all theother risks, hence thisrisk when combinedwith others would leadto significant impacton the revenuesgenerated by theproject, and thisshould be given extraattention by thelender.


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INTEGRATED RISK ANALYSIS


Risk DefinitionOverall

CorrelationWeight Score

L1 Procurement of NOCs 1.8 7% 4

L2 Land Approvals 1.4 5% 3

La1 Wages and Productivity of the Workers 3 12% 3

La2 Contractual Laws 3.3 13% 4

La3 Strikes and Workers’ Union Power 3.5 14% 2

O1 Safety Risk 2.8 11% 4

O2 Inventory and System Risk 1.2 5% 3

M1 Health Standards 3.8 15% 3

M2 Tenant Rates and Laws 2.2 9% 3

F1 Debt and Interest Rate Risk 1.4 5% 2

F2 Capitalization Rate Risk 1.4 5% 3

Overall Risk Occurrence Probability 9%AFFO Net present value = Rs. -1937.7 crores

The integrated risk analysis is extremelycrucial from the lender’s point of view as itgives an overall picture of the risksassociated with the project and theirimpact.

The scores signify the impact the riskwould have on the revenues generated bythe project and the scores would indicatethe probability of the occurrence of therisk.

The probability of the all the risks occurringsimultaneously is 9 % and the NPV in theworst case scenario is given below:


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× Investments attracted by real estate sector from various public and private sources across India have declined by 6% in past four years i.e. from a level of Rs 15.2 lakh crore as of 2011-12 to about Rs 14.3 lakh crore as of 2014-15

Private sector accounted a major share of 85% of the total investments attracted by the real estate sector across India while government or public sources accounted for the remaining share

× Real estate projects with about 76% of the total investments attracted by the sector across India remained non-starter during the aforesaid period

Five states namely Maharashtra (21%), Uttar Pradesh (14%), Gujarat (13%), Karnataka (12%) and Haryana (8%) have highest share in total investments of the real estate sector in India as of 2014-15

× Jharkhand (40%), Himachal Pradesh (37%), Madhya Pradesh (29%) and Haryana (16%) have registered maximum fall in real estate investments

In 2015, overseas PE players invested about $2.3 billion into the sector, as per a Knight Frank estimate . This indicates a positive economic climate and indicates more higher investments in the coming years, due to government policies favouring FDI.

It is favourable to set up a commercial realty project in Bangalore as the demand there is high for office space due to the boom in the startup industry and the opening of many IT offices in the area.s


41Back

PESTLE ANALYSIS

SWOT ANALYSIS

Competitor Analysis Weighted Rating

Political

Commitment to attain SDGs and poverty by 2030

Significant amount of investment from

Russia

Won accolades from NITI Aayog

for excellent governance

EconomicBorrowings of Rs.

21000 crore in annual budget

Setting up of industrial

townships of 100 acres in every constituency

Four new greenfield

airport projects to come up in

state

Sociological Creation of 5 lakh jobs in the state by

2020

CBDT extends 5 year tax sops to 7

districts

Issuance of special

securities worth Rs. 8,256 crore

under UDAY scheme

TechnologicalUDAY and DISCOMS

working toward "Power for All"

ADB to provide funding over $630

million for technological advancement

Amaravathi to become a tech hub and house

hunting business will be

'digital'

Legal

Dilution of powers of APIA results in

lesser time of clearance of

proposals

New act pertaining to industrial

corridors to be in place soon

Rs. 99.62 crore to be released under AMRUT

scheme

Environmental

NGT imposes strict orders on

construction in new Capital Amaravathi

Large areas of state are frequenty flood

hit

Dispute over the Krishna River

with Telangana

Competitors Price Quality

Customer

Service

Localit

y

Amenitie

s Possession

Product

Range

Total

Score

L&T Realty 0.75 1.4 1.6 1.05 0.6 0.4 0.3 L&T Realty 6.1

ASC 1.5 0.6 1 0.75 0.4 0.15 0.15 ASC 4.55

INDIABULLS 1 1.6 1.2 0.9 0.8 0.3 0.2 INDIABULLS 6

M.V.V BUILDERS 1.75 1 0.8 0.6 0.1 0.25 0.15M.V.V BUILDERS 4.65

ARC ESTATES 1.5 0.8 0.8 0.6 0.1 0.15 0.15 ARC ESTATES 4.1

Others 0.75 0.6 0.8 0.75 0.3 0.25 0.25 Others 3.7

Weights Ratings Score Weights Ratings Score

Strength Opportunity

Skillful Workforce 10% 4 0.4 Government’s investment initiative 15% 4 0.6

Disruptive growth in construction equipment 10% 3 0.3 Stable Government 15% 4 0.6

Market leadership 20% 5 1

real estate sentiments index showcase

high demand 5% 2 0.1

Diversified revenues providing resilience 10% 3 0.3

Exemption limit on account of interest

raised 5% 3 0.15

Weakness Threats

Increasing debt impacting financial flexibility 15% 2 0.3 Rising material cost 20% 4 0.8

rising manpower and material costs 10% 2 0.2 High inventory levels 10% 4 0.4

lack of adequate sources of finance 10% 3 0.3 Low R&D activities 10% 3 0.3

Insurance for project 15% 2 0.3 Approvals and procedural difficulties 20% 5 1

Team: RadioActive

APPENDIX FOR BIHAR

42

Political

NSDC along with Rise India to set up training centres to impart skills

to 50 lakh people

Bihar worst on key social welfare schemes

of Centre

Economic

Major progress in urban municipal reforms like e-governance, water and energy audit and 90% collection of municipal taxes and user chargesState with the youngest

population

Construction sector growth at 16.58 per cent annually and

banking and insurance sector at 17.7 per cent

SociologicalLaw and order situation

on the decline

Development work badly hit due to financial

constraints

Technological

MoUs signed up with NTPC and NHPC to set up greenfield power

plants

AAI to revive three airfields

Legal

Industry promotion policy in place including

land conversion fees and stamp duty

Scrapping 20 per cent capital subsidy to new

industries

Environmental

Madhav ChittleCommittee set up to

combat flooding due to Farraka barrage

CEE, along with UNICEF, to come up with new

hygiene model

Back

PESTLE ANALYSIS





Market leadership 20% 2 0.4





raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


Customer

Service Locality Amenities Possession

Product

Range

Total

Score


Rukmani Buildtech 1.5 1.2 1.4 0.9 0.5 0.3 0.25Rukmani Buildtech 6.05

Shravani Engicon 1.75 1.4 1.2 0.9 0.6 0.3 0.25Shravani Engicon 6.4

AGR Estates 1 1 0.8 0.6 0.3 0.3 0.2 AGR Estates 4.2

Badal Construction 1.25 0.8 0.8 0.6 0.3 0.35 0.15Badal

Construction 4.25

Others 0.75 1 1 1.05 0.5 0.3 0.25 Others 4.85


Team: RadioActive

APPENDIX FOR GUJARAT

43Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


PoliticalAirbnb and the govt to

sign MoU to boost tourism

Vibrant Gujarat

Summit to attract more

than 120 Singaporean

investors

EconomicHighest tariff of Rs.

6.12 per unit of power

quoted for state

Govt identified more

than 200 hundred

infrastructure projects

for next six months

Sociological

RoPax service to come

up next year leading to

socioeconomic

development

67000 youths to be

appointed in state

services soon

Technological

Telcos like Airtel and

Vodafone recently

introduced 4G services

leading to improved

digitization

Extensive petroleum refining and port

activites lead to large technological developments

LegalADR mechanism to reduce pendency of

cases

Swaraj Abhiyan to set up district level legal

bodies

EnvironmentalTwo of five Swacch Bharat awards to be awarded to the state

State faces 20% deficit in seasonal rainfall

this monsoon


Customer

Service Locality

Amenitie

s Possession

Product

Range

Total

Score

L&T Realty 1 1.4 1.6 1.05 0.6 0.4 0.3 L&T Realty 6.35

Iscon Group 1 1.4 1.2 1.05 0.5 0.25 0.4 Iscon Group 5.8

Deep Group 1.25 1 1.2 0.9 0.5 0.25 0.2 Deep Group 5.3

Shree Sharanam Group 1.5 1 1 0.75 0.4 0.35 0.2

Shree Sharanam

Group 5.2

Siddhi Developers 1.25 0.8 0.8 0.6 0.3 0.35 0.15Siddhi

Developers 4.25

Others 0.75 1.2 1.4 1.05 0.6 0.35 0.25 Others 5.6

Team: RadioActive

APPENDIX FOR HARYANA

44Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


PoliticalHaryana Tourism to

go for public-private

partnership model

BJP government in

shambles, with

leaders being

attacked time to time

Economic

Centre to invest Rs.

15,000 crore to

extend Panipat

refinery

Chinese real estate

agent Dalian Wanda

to develop industrial

parks in the state

Sociological

Jaat agitaion in the

state led to losses

over Rs. 20,000 crore

and fear in the people

State is second in

terms of number of

police complaints

filed

Technological

Symposium on

MICDTI results in

large technology

transfer

High tech system for power transmission

to be set up soon

LegalSwaraj Abhiyan to set up district level

legal bodies

NITI Aayog persuades state to reform land lease

law

EnvironmentalNABARD takes steps to revive water table

NABARD sanction Rs. 205 crore loan for

environmental protection


Customer


Product

Range

Total

Score


DLF 1.5 1.6 1.8 1.05 0.9 0.35 0.2 DLF 7.4

Mahindra Lifescape 1.25 1.6 1.6 0.9 0.8 0.3 0.2Mahindra Lifescape 6.65

Sobha Limited 1.5 1.4 1.6 1.05 0.8 0.35 0.2 Sobha Limited 6.9

Ansal Builwell 1.5 1 1.4 1.05 0.8 0.35 0.2 Ansal Builwell 6.3

Others 1.5 1.4 1.2 1.05 0.6 0.35 0.2 Others 6.3

Team: RadioActive

APPENDIX FOR JHARKHAND

45Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


PoliticalCM Raghubar Das

invites US industries to

‘Make in Jharkhand’

Jamshedpur, Dhanbad

and Bokaro to turn into

smart cities

Economic

CCEA approves Rs.

1,955-cr Bihar-

Jharkhand link road

project leading to more

development

Government to part-

finance GAIL's Rs

13,000-crore pipeline

project leading to

availability of gas for

projects

Sociological

Continuous protests

against projects on

acquisition of land, relief

and rehabilitation

The number of agrarian

riots in Jharkhand

increased by 4,950%

from 2014 to 2015

Technological

Single window clearance

and online application

and approval reduces

project development

time

Digital Jharkhand to lead to rampant data

driven change and transformation

Legal

Jharkhand Industrial and Investment Promotion

Policy, 2016 and Industrial Park Policy to

support the business community

Time bound grievance handling is one of the key initiatives of the

legal system

Environmental

Seraikela-Kharsawan is the first district to give

environmental clearance for small projects

Environmental protection an integral

part of ‘business reforms action plan’ to ease business climate


Customer

Service Locality

Amenitie

s Possession

Product

Range

Total

Score


S K Construction 1.25 1.4 1.2 1.05 0.6 0.25 0.25 S K Construction 6

Rameshwaram Projects 1.75 1.4 1.2 1.05 0.8 0.25 0.3Rameshwaram Projects 6.75

Vasundhra Homes 1.5 0.8 1 0.6 0.3 0.25 0.15Vasundhra Homes 4.6

J D Infra 1.5 0.8 0.8 0.6 0.3 0.3 0.2 J D Infra 4.5

Others 0.75 1 1.2 0.6 0.5 0.3 0.25 Others 4.6

Team: RadioActive

APPENDIX FOR CHHATTISGARH

46Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


PoliticalAir services to be

developed in all four

corners of state

Govt obtained

investment

proposals worth Rs.

6,50,000 crore in the

current fiscal

Economic

High number of

thermal power plants

due to availability of

coal

Fivefold increase in

mineral revenue

leading to local

development

Sociological

High naxal activity

leading to

continuous

disruption of civilian

life

Education city

established at

Dantewada for

children afflicted by

Naxal violence

Technological

Companies like

MachineHire help in

easy procurement of

earth moving

machines

Telcos like Airtel launch 4G internet

leading to digitalization and people looking for

housing online

LegalBill passed for

privatisation of the Shivnath River

First State To Have Commercial Dispute

Resolution Centre And Commercial

Court

Environmental

CWC approves 12 projects on

Mahanadi leading to drying up of the

river by 2022

Govt set up panel to revamp forest law


Customer

Service Locality

Amenitie

s Possession

Product

Range

Total

Score


GT Capital Homes 1 1.2 1.2 1.05 0.6 0.35 0.2GT Capital

Homes 5.6

Shreeji 1.25 1.2 1 0.9 0.5 0.25 0.25 Shreeji 5.35

Wallfort 1.75 1.2 1 1.05 0.7 0.25 0.3 Wallfort 6.25

Balaji 1.25 0.8 0.8 0.6 0.3 0.35 0.15 Balaji 4.25

Others 0.75 1.2 0.8 1.05 0.6 0.25 0.25 Others 4.9

Team: RadioActive

APPENDIX FOR MADHYA PRADESH

47Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS



Customer


Product

Range

Total

Score


Man Developers 1 1.4 1.2 1.05 0.4 0.25 0.15 Man Developers 5.45

Deveshi Infrastructure 1.75 1.4 1 0.9 0.7 0.3 0.1Deveshi

Infrastructure 6.15

SkyeEarth Developers 1.75 1 0.8 0.6 0.3 0.25 0.2SkyeEarth

Developers 4.9

APPOLO DB group 1.25 0.8 0.8 0.6 0.3 0.35 0.2APPOLO DB

group 4.3

Others 0.75 1.2 1.4 1.05 0.5 0.35 0.25 Others 5.5

Political

Long outgrown its "BIMARU" status and

experiencing fast-tracked growth

Stands in fifth position on ease of

doing business

Economic

Global Investment Summit(2014) saw investments worth

$66.1 billion, witnessing a $20

billion increase from previous year

Number one state in the country for

allotment of industrial land and online

construction permits

SociologicalTop 4 cities just

account for 11% of the state's population

Human capital and hman development

indices extremely low in the state

Technological

Promotion of solar power by having

biggest solar park in India

Private intra state air service to be in operation soon

Legal

Swaraj Abhiyan to set up district level legal bodies to complete

backlog of cases swiftly

The Code of Criminal Procedure (Madhya

Pradesh Amendment) Act, 2007 has ensured

swift justice to victims, thereby making the state

more safer and crime free

Environmental

Failure in obtaining required

environmental clearances have led to cancellation of MoUs

Air Toxicity levels exceed permissible limits in the city of

Gwalior

Team: RadioActive

APPENDIX FOR KERALA

48Back

PESTLE ANALYSIS










raised 5% 2 0.15

Weakness Threats





SWOT ANALYSIS


Political

Allegations of violence

against political

representatives under

LDF rule

The Government has

laid down the roadmap

for India, signifying a

major support to

manufacturing and real

estate sector.

Economic

Opposition of Regional

Comprehensive

Economic Partnership

(RCEP) agreement

State with the high

state GDP per capita

Sociological12.6% of the

population of the state

is elderly.

100% literacy in the

state, with 11% of

businesses being run

by women

Technological

Partnership with UK to

avail of technical

assistance in smart

cities and infrastructure

development

Collaboration with Costford on cost-

effective and energy efficient housing and usage of renewable

materials

Legal

New legal assistance facility provided for NRIs in matters of

property

Vigilance and Anti-Corruption Bureau is an extremely strong

and reliable institution in the state

Environmental

Environmental survey of 200 acre land to to faciliate development

of buildings and commercial complexes

Drought-like situation in Palakkad district

due to acute deforestation and

reversal of action of AHADS


Customer


Product

Range

Total

Score


Nest Infra 1 1.4 1.2 1.05 0.7 0.3 0.25 Nest Infra 5.9

ABAD Builders 1.75 1.2 1 0.9 0.6 0.3 0.3ABAD

Builders 6.05

VINAYAKA HOMES 1.75 1 0.8 0.6 0.3 0.25 0.15VINAYAKA

HOMES 4.85

INFRA HOUSING 1.25 1.4 1.4 0.9 0.7 0.35 0.15INFRA

HOUSING 6.15

others 0.75 0.8 1 0.6 0.5 0.35 0.25 others 4.25

Team: RadioActive

APPENDIX FOR KARNATAKA

49Back

PESTLE ANALYSIS










raised 5% 1 0.5

Weakness Threats





SWOT ANALYSIS


Political

State faces water dispute

issue with six states

Development sluggish in

North Karnataka due to

delay in proper

implementation of the Dr

Nanjundappa Committee

recommendations on

regional imbalance

EconomicKarnataka to foster

economic ties with Polish

region

NHAI has issued letter of

award (LOA) for two

national highways

sections in Karnataka on

engineering-procurement-

contract (EPC) mode

SociologicalRiots on political issues

are commonplace in the

state

State has a Total Fertility

Rate(TFR) lesser than 2.1

indicating an ageing

population

TechnologicalIsraeli Technology to

resolve the water crisis in

the state

VTU, Karnataka Mines Department sign MoU to test suitability of M-sand

for construction

Legal

State law makes it mandatory for builders

developing a project where the land exceeds

500 square metre to register themselves with the regulatory authority

Several DisputesTribunals set up to tackle the cases

dealing with water

Environmental

Untreated garbage piling up at waste management

centres and state directed by NGT to tackle

this

Grey water to be recyledto reduce demand in

homes

Competitors Price QualityCustomer

ServiceLocality Amenities Possession

Product

Range

Total

Score


Vandana Infra 1 1.4 1.2 1.05 0.4 0.25 0.15 Vandana Infra 5.45

PURAVANKARA PROJECTS

1.25 1 0.8 0.75 0.7 0.3 0.2PURAVANKARA

PROJECTS5

KONCEPT AMBIENCE 1.75 1.6 1.6 1.05 0.7 0.4 0.35KONCEPT

AMBIENCE7.45

BRIGADE ENTERPRISES 1.25 1.2 1.2 0.9 0.6 0.35 0.25BRIGADE

ENTERPRISES5.75

Others 0.75 1.2 1.4 1.05 0.5 0.35 0.25 Others 5.5

Team: RadioActive

APPENDIX FOR RAJASTHAN

50Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


PoliticalThe state is still a part of

the "BIMARU"Club

Govt fixed a minimum

wage of US$ 85 (Rs

5,642) for domestic

workers per month in

January 2016

EconomicBetween 2005 and 2014,

the economy just grew at

a CAGR of 18%

L&T synchronises 660

MW unit at Rajasthan

project

SociologicalGrowth in jobs between

2001 and 2011 only a

mere 2.6%

Rural poverty is above

30 per cent of population

Technological67% of houses in

Rajasthan use electricity

for lighting purposes

NLC India abandon plans to set up solar power project in the state

Legal

Rajasthan Urban Land (Certification of Titles) Act, 2016 sets the legal framework for granting of legitimate rights to a property owner in that

state.

High Court of Rajasthan has become the fourth

in the country to provide E-stamp facility

Environmental

Ministry of Environment and Forests relaxes rules

for small Rajasthan projects following NGT

order

"Digital Rajasthan" to ensure environmental

clearances are obtained speedily


Customer

Service Locality

Amenitie

s Possession

Product

Range

Total

Score


UNIQUE BUILDERS 1 1.4 1.2 1.05 0.5 0.25 0.15UNIQUE

BUILDERS 5.55

UDB 1.75 1.4 1 0.9 0.7 0.3 0.1 UDB 6.15

UPASNA GROUP 1.75 1 0.8 0.75 0.3 0.25 0.15UPASNA GROUP 5

TRIMURTY GROUP 1.25 0.8 1 0.6 0.4 0.35 0.15TRIMURTY

GROUP 4.55

OTHERS 0.75 1.2 1.4 1.05 0.5 0.35 0.25 OTHERS 5.5

Team: RadioActive

APPENDIX FOR UTTAR PRADESH

51Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS


PoliticalThe state to set up skill

development centres in

every district

Communal Strife and

Disturbances a major

source of disturbance in

the society

EconomicNLC begins

construction work for

1980-MW project in UP

Indian Oil to lay India's

longest LPG pipeline

from Gujarat coast to

Gorakhpur in eastern

Uttar Pradesh

SociologicalState with the youngest

population

Largest population in

the country

TechnologicalNumber of fast trains to

increase over the next

few months

BHEL commissions another 660 MW

thermal unit in Uttar Pradesh

LegalSwaraj Abhiyan to set up district level legal

bodies

Centre sets up panel to draft an exclusive law

on river Ganga

Environmental

Floodplains have been encroached to build

apartments and housing societies and

NGT to tackle this

75% of all environmental crimes in India are reported

from Uttar Pradesh and Rajasthan, data released by the

National Crime Record Bureau (NCRB)

indicates.


Customer

Service Locality

Amenitie

s Possession

Product

Range

Total

Score


Amrapali Group 1 1.4 1.2 1.05 0.5 0.25 0.35 Amrapali Group 5.75

GAURSONS INDIA LTD 1.25 1.4 1.4 0.9 0.7 0.3 0.25GAURSONS INDIA LTD 6.2

IMPERIA STRUCTURES 1.25 1.2 1 0.9 0.6 0.25 0.3IMPERIA

STRUCTURES 5.5

MAHAGUN INDIA 1.25 1.2 1.2 1.05 0.6 0.35 0.3MAHAGUN

INDIA 5.95

Others 1 1.2 1.4 1.05 0.5 0.35 0.25 Others 5.75

Team: RadioActive

APPENDIX FOR TELANGANA

52Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS



Customer


Product

Range

Total

Score


Mahindra Lifescape 1 1.4 1.2 1.05 0.8 0.35 0.2Mahindra Lifescape 6

SMR Holdings 1.25 0.6 1 0.9 0.7 0.3 0.1 SMR Holdings 4.85

APARNA 1.75 1 0.8 0.6 0.3 0.25 0.15 APARNA 4.85

Aditya Construction 1.25 0.8 0.8 0.6 0.3 0.3 0.15Aditya

Construction 4.2

Others 0.75 1.2 1.4 1.05 0.5 0.35 0.25 Others 5.5

Political

Telangana to propose

new districts and

formation of new

administration

"Mission Kakatiya" is an

ambitious project

launched by the Govt to

rejuvenate 47,000 tanks

in the state by 2020.

EconomicReal estate rally boosts

Telangana's stamp

revenue by 31%

Tax incentives for 9

backward districts of

Telangana

Sociological

Worst South Indian state

in terms of female

literacy, education,

advancement and health

Survey showcase poor

welfare indicators and

living conditions in the

state

TechnologicalHP to develop a smart

city in Telangana

Sagar Cements to set up coal based power plant at company's unit and expand the capacity of

the grinding unit

Legal

Setting up of Municipal Building Tribunal to deal

with cases related to encroachments in urban

areas

8,000 court, judicial dept employees go on strike in Telangana affecting

legal services throughout the state

Environmental

20 per cent of the countrys coal deposits in the country are found in

the state

Meetings with US Environmental

Protection Agency for efficient methods to

curb industrial pollution

Team: RadioActive

APPENDIX FOR TAMILNADU

53Back

PESTLE ANALYSIS










raised 5% 3 0.15

Weakness Threats





SWOT ANALYSIS



Customer


Product

Range

Total

Score


Mahindra Landscape 1 1.4 1.2 1.05 0.8 0.35 0.2Mahindra Landscape 6

TVS Emerald 1.75 1.4 1 0.9 0.7 0.3 0.1 TVS Emerald 6.15

Shobha 1.75 1 0.8 0.6 0.3 0.25 0.15 Shobha 4.85

DLF 1.25 0.8 0.8 0.6 0.3 0.35 0.15 DLF 4.25

Radiance Realty 0.75 1.2 1.4 1.05 0.5 0.35 0.25 Radiance Realty 5.5

Political

Political strife between

Karnataka and TN

leading to political

instability

Rail and road traffic hit by

regular agitations and

strikes

Economic

Tamil Nadu government

has assured full

cooperation to German

investments in the state

Tamil Nadu’s spending

on public projects like

road and other

infrastructure fell 33 per

cent year on year in the

first four months of 2016

SociologicalHome to more than a

million migrant workers

Total Fertility Rate(TFR)

below 2.1% indicating

that the state has a fast

ageing population

Technological

Manufacturing

industries in state hit by

economic slowdown,

drop in demand and

delayed payments

Tamil Nadu Adi Dravida Housing and

Development Corporation to provide financial

assistance online

Legal

Plea on establishing a hi-tech industrial park in

Nanguneri SEZ in Tirunelveli district

rejected by the court

Over 10,000 cases settled in lok adalats in Tamil

Nadu with award amount of Rs 91.48 crore held on

October 8th

Environmental

Almost all districts received below average rainfall, to be declared

"drought hit"

Madras High Court Bench held that it is not

competent to entertain public interest litigation

(PIL) petitions on environmental issues

Team: RadioActive

Thank

You

Anupreet Choudhary

1st Year

Indian Institute of Management, Rohtak

B. Tech (Civil),

Indian Institute of Technology, Guwahati

Shubham Aggarwal

2nd Year


B.E. (Mech) PEC University of Technology

Swastika Singh

1st Year


B. Tech (Civil) National Institute of Technology Karnataka

TEAM: RadioActive

54