SUBRO Pvt. Ltd.
Presented to Prof. Balasubramanium
1
Group Members
Name Yogesh Kamat
2
Introduction
? ? ? ? Birth of SUBRO Private limited company Company s focus areas Awards achieved
3
Location
? Pune
4
Promoter s Details
? ? ? ? ? ? H O Naik, Chairman & Managing Director D K Desai, Director M C Khan, Marketing Head & Director R J Patil, Chief Engineer & Director A. R. Shah, CFO & Director B. K. Tiwari Independent/Executive Director
5
Market & Economic Outlook
? Pune area is booming at this moment, overall business growth over the past seven years has averaged approximately 9.5% and is expected to continue for at least the next four years. This constitutes an attractive market. ? We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction.
6
Market Segmentation
37% 22%
11% 30%
7
Market Size
? The current size in India is estimated at $50bn. ? 87 key players account for nearly one third. ? The rest is distributed amongst the 25,000 plus smaller players. ? Construction activity being labor intensive has generated employment for about 33 million people in the country.
8
Growth drivers
? ? ? ? ? ? ? ? Booming market Growth in IT/ITES Sector Growth in FDI Shift from Sale Model to Lease & Maintain Model Rising consumerism (disposable income) Large corporate houses entering the organized retail sector Robust and sustained macro economic growth Upsurge in industrial & business activities, especially new economy sectors ? Rapid Urbanization ? Gamut of financing options at affordable interest rates
9
PULL FACTORS
10
PUSH FACTORS
11
12
13
14
SWOT
Strength
Weakness
Opportunity
Threats
15
? ? -
Strength Low cost well educated & skilled labour force Employment and training opportunities Sufficient availability of raw materials and natural resources Weakness Distance between construction projects, reduce efficiency High amount of money need to be invested External allocation of large contracts become tough
16
? Opportunities - Financial supports like bank loan and growth in people income - Public sector projects through private partners - Continuous private sector housing boom ? Threats - Inefficient accessibility in planning - Abnormal casualties - Current economic situation
17
Porter s Five Forces
Threat of new entrantLow barriers to entry
Bargaining power of supplier Moderate / High
Competitive Rivalry High
Bargaining power of buyer Low / Moderate
Threat of substitute product Low
18
Economic Outlook
19
Economic Outlook (Contd)
? Market size of Rs4,37,017crores in 2009-10 with an increase in GDP contribution by 2.92% over the previous year 2008-09. ? The fourth largest contributor to the national economy and employment generation avenue in the country. ? The Planning Commission of India published the 11th Economic Planning 2007-2012, and set aside $492billion.
20
Major Player
21
Key Risks & Concerns
? Inflation ? Increase in Interest Rate ? Rising Input Cost ? Liquidity crunch ? Slow Sales Growth ? Margin pressure ? Mounting debt
22
Technical Aspects
23
Plant Layout
24
Saleable area 1735 sq.ft
25
Financial Analysis
Estimated Balance Sheet of FUTURE Realty Estate Pvt. Ltd as on 28/03/2012 Liabilities
Owners Capital H O Naik D K Desai 10000000 10000000
Rs
Rs
Assets
Land Machinery Office Premises Cash & Bank Balance Accounts receivable
Rs
Rs
50000000 20000000 5000000
M C Khan Borrowed Funds Term loan Advances Recd Total
10000000 30000000
8000000
50000000 20000000 100000000
17000000
Total
100000000
26
NPV Method
Year 0 1 2 3 Cash Flow - 4.5 Cr. 1.5 Cr 1.25 Cr 2.75 Cr Total NPV = PVCI Initial Investment NPV is Positive PVCI (8%) 0 16200000 1,07,16,135 2,18,30,387 4,87,47,121 4,50,00,000 37,47,121
27
IRR Method
Expected Rate of Return @ 9% - We 4,55,17,513 have outflow of Expected Rate of Return @ ?- We have 4,50,00,000 outflow of Expected Rate of Return @ 10 % - We have outflow of 4,46,28,099 517513 = 1.39 371901 5,17,513
-
3,71,901 Hence IRR = 9% + 1.39 = 10.39 %
28
Recommendation
? If the economy has to grow at the rate of 89%, or even a percentage point lesser on a sustained basis, the government will have to make investments in infrastructure and then only will real estate boom. ? There is a lot more mileage that can be sought from real estate investing than just capital gains.
29
? Tenanting, redeveloping and other strategies will create the property to generate regular income as well. These gains can provide a hedge for investors against adverse price movements. ? It is possible that with evident steps of the possible opening up of the real estate mutual funds industry and the participation of financial institutions into property investment business, it will pave the way for more organized investment in real estate in India, which would be an apt way for real estate investors to get an alternative to invest in property portfolios at all levels. ? Overall, real estate is expected to offer a good investment alternative to stocks and bonds over the coming years.
30
Thank You
31
doc_292032348.pptx
Presented to Prof. Balasubramanium
1
Group Members
Name Yogesh Kamat
2
Introduction
? ? ? ? Birth of SUBRO Private limited company Company s focus areas Awards achieved
3
Location
? Pune
4
Promoter s Details
? ? ? ? ? ? H O Naik, Chairman & Managing Director D K Desai, Director M C Khan, Marketing Head & Director R J Patil, Chief Engineer & Director A. R. Shah, CFO & Director B. K. Tiwari Independent/Executive Director
5
Market & Economic Outlook
? Pune area is booming at this moment, overall business growth over the past seven years has averaged approximately 9.5% and is expected to continue for at least the next four years. This constitutes an attractive market. ? We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction.
6
Market Segmentation
37% 22%
11% 30%
7
Market Size
? The current size in India is estimated at $50bn. ? 87 key players account for nearly one third. ? The rest is distributed amongst the 25,000 plus smaller players. ? Construction activity being labor intensive has generated employment for about 33 million people in the country.
8
Growth drivers
? ? ? ? ? ? ? ? Booming market Growth in IT/ITES Sector Growth in FDI Shift from Sale Model to Lease & Maintain Model Rising consumerism (disposable income) Large corporate houses entering the organized retail sector Robust and sustained macro economic growth Upsurge in industrial & business activities, especially new economy sectors ? Rapid Urbanization ? Gamut of financing options at affordable interest rates
9
PULL FACTORS
10
PUSH FACTORS
11
12
13
14
SWOT
Strength
Weakness
Opportunity
Threats
15
? ? -
Strength Low cost well educated & skilled labour force Employment and training opportunities Sufficient availability of raw materials and natural resources Weakness Distance between construction projects, reduce efficiency High amount of money need to be invested External allocation of large contracts become tough
16
? Opportunities - Financial supports like bank loan and growth in people income - Public sector projects through private partners - Continuous private sector housing boom ? Threats - Inefficient accessibility in planning - Abnormal casualties - Current economic situation
17
Porter s Five Forces
Threat of new entrantLow barriers to entry
Bargaining power of supplier Moderate / High
Competitive Rivalry High
Bargaining power of buyer Low / Moderate
Threat of substitute product Low
18
Economic Outlook
19
Economic Outlook (Contd)
? Market size of Rs4,37,017crores in 2009-10 with an increase in GDP contribution by 2.92% over the previous year 2008-09. ? The fourth largest contributor to the national economy and employment generation avenue in the country. ? The Planning Commission of India published the 11th Economic Planning 2007-2012, and set aside $492billion.
20
Major Player
21
Key Risks & Concerns
? Inflation ? Increase in Interest Rate ? Rising Input Cost ? Liquidity crunch ? Slow Sales Growth ? Margin pressure ? Mounting debt
22
Technical Aspects
23
Plant Layout
24
Saleable area 1735 sq.ft
25
Financial Analysis
Estimated Balance Sheet of FUTURE Realty Estate Pvt. Ltd as on 28/03/2012 Liabilities
Owners Capital H O Naik D K Desai 10000000 10000000
Rs
Rs
Assets
Land Machinery Office Premises Cash & Bank Balance Accounts receivable
Rs
Rs
50000000 20000000 5000000
M C Khan Borrowed Funds Term loan Advances Recd Total
10000000 30000000
8000000
50000000 20000000 100000000
17000000
Total
100000000
26
NPV Method
Year 0 1 2 3 Cash Flow - 4.5 Cr. 1.5 Cr 1.25 Cr 2.75 Cr Total NPV = PVCI Initial Investment NPV is Positive PVCI (8%) 0 16200000 1,07,16,135 2,18,30,387 4,87,47,121 4,50,00,000 37,47,121
27
IRR Method
Expected Rate of Return @ 9% - We 4,55,17,513 have outflow of Expected Rate of Return @ ?- We have 4,50,00,000 outflow of Expected Rate of Return @ 10 % - We have outflow of 4,46,28,099 517513 = 1.39 371901 5,17,513
-
3,71,901 Hence IRR = 9% + 1.39 = 10.39 %
28
Recommendation
? If the economy has to grow at the rate of 89%, or even a percentage point lesser on a sustained basis, the government will have to make investments in infrastructure and then only will real estate boom. ? There is a lot more mileage that can be sought from real estate investing than just capital gains.
29
? Tenanting, redeveloping and other strategies will create the property to generate regular income as well. These gains can provide a hedge for investors against adverse price movements. ? It is possible that with evident steps of the possible opening up of the real estate mutual funds industry and the participation of financial institutions into property investment business, it will pave the way for more organized investment in real estate in India, which would be an apt way for real estate investors to get an alternative to invest in property portfolios at all levels. ? Overall, real estate is expected to offer a good investment alternative to stocks and bonds over the coming years.
30
Thank You
31
doc_292032348.pptx