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Why real estate in Mumbai is so desirable to everyone?

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After the pandemic, Mumbai’s real estate market reached all-time highs in quantity and cost.

Bengaluru: A 17-acre plot of land in central Mumbai that was formerly home to a textile mill was sold by DLF Ltd. to Lodha Developers Ltd. for Rs 2,725 crore eleven years ago. This year, a developer based in Gurgaon, the largest listed realtor in India, announced that it would be returning to the busiest real estate market in the nation.

DLF and Trident Group, a builder based in the National Capital Region (NCR), are collaborating on a slum rehabilitation project in the suburban Mumbai area.

DLF wants to diversify beyond Gurgaon amid a housing boom if its 2012 decision was to pull out non-core markets to concentrate on its home ground at the beginning of a multi-year residential slowdown. Mumbai would naturally be its first destination.

It propels you to a different scale and price point because you are the financial capital. We finally took the risk after examining opportunities in recent years, said Aakash Ohri, DLF’s group executive director and chief business officer.

In a similar vein, Godrej Properties Ltd. is situated in Mumbai. After assembling a sizable portfolio of projects in the NCR, the company will focus on its home market. The company’s chief executive officer (CEO), Gaurav Pandey, stated, “We have done about seven transactions in Mumbai in the last two years, and we are optimistic because the market has seen good price and volume growth.”

The Mumbai Metropolitan Region (MMR) secured the highest percentage of sales as the housing market recovered and reached all-time highs following the pandemic. Premium and luxury projects have been a major factor in MMR sales. It comes as no surprise that seasoned developers from MMR and beyond want a piece of the action.

MMR is undoubtedly a difficult market to break into. Though the costs are higher than in Bengaluru and the NCR, the profit margins are better. Getting project approvals can be difficult, and finding land can be difficult. Still, it is a market that cannot be disregarded, as Ohri alluded to.  

Deliverer from B’lore 

Most lenders and institutional investors became cautious about investing in Mumbai, preferring to concentrate on more stable markets in south India, following the non-banking financial company Infrastructure Financing and Leasing Service Ltd.’s repeated defaults in 2018. These events sent shockwaves through the financial services sector.

Developers in Mumbai had the highest level of leverage and NBFCs had the greatest overall exposure to the city’s real estate market. Post-pandemic, that was different. Opportunities for new and experienced developers were presented by the turmoil in MMR that led to the collapse of many developers.

Consider the Prestige Group. The Bengaluru-based developer has acquired the troubled projects in Mumbai from banks, investors, developers, and the National Company Law Tribunal. 

With sales in Mumbai of Rs 2,700 crore in 2022-2023, it plans a 25-30% growth this year. “Sales velocity will follow if you choose the locations well and price it sensibly,” stated Venkat Narayana, CEO of Prestige Group. “The demand is good.” 

Puravankara Ltd., a different developer based in Bengaluru started its first project in Mumbai in 2021 and is searching for mid-segment and premium acquisition opportunities.

Group CEO Abhishek Kapoor stated that although there are obstacles to overcome before entering Mumbai, there are lucrative opportunities. In Mumbai, the average price realization is at least Rs 15,000 – 25,000 per square foot, whereas in other markets it is Rs 8,000–10,000.

We are accustomed to seeing a lot of building, but Mumbai adds value and margins, and it will play a bigger role in our future growth, says Kapoor.

Many developers currently just want to take advantage of the value that the luxury market offers. 

The opulent peak 

The year, the prices of the sea-view homes in Lodha Malabar, an under-construction project on Walkeshwar Road in South Mumbai, set a benchmark at Rs 1.5 lakh per square foot. 

Private purchasers paid between Rs 250 and Rs 350 crore for several apartments. The biggest developer in MMR is Macrotech Developers Ltd., which offers projects under the Lodha brand. In 2022-2023 the company made Rs 12,064 crore in sales, with Rs 10,000 crore coming from Mumbai alone. Homes costing Rs 5 crore or more account for about 40% of its revenue.

“There is a strong demand for larger, luxurious homes, particularly among families who have always resided in their ancestral homes,” Prashant Bindal, chief sales officer of the company, stated.

There is ample room for high-caliber developers in the premium and luxury segments because there are not enough players in MMR to meet demand. Anuj Puri, chairman of the real estate advisory Anarock Group, said, “It is like a combination of two or three cities within it, and there are discerning buyers who are willing to pay for premium projects.”

Every six months, Mumbai has recorded sales of luxury homes worth approximately Rs 5,300 crore since 2018. That doubled in the first half of 2023, as sales of homes priced at Rs 10 crore and above increased by almost 50% to Rs 11,400 crore, per a July report from Sotheby’s International Realty and CRE Matrix.

The ultra-luxury market, with prices ranging from Rs 40 crore to Rs 70 crore expanded even more quickly.

Developers and analysts predict that the luxury home market will continue to grow. “The way the financial services sector has gained post-COVID has had an immediate effect on buying real estate.” The financial services sector’s post-COVID gains directly affect purchases. According to Amit Bahgat, managing director (MD) and CEO of ASK Property Investment Advisors, the luxury market will grow as wealth is generated. 

Competitors?

MMR has the highest sales and launches compared to NCR and Bengaluru. Unsold inventory has increased, but that’s because the rise in launches has surpassed sales, said Pankaj Kapoor, MD of Liases Foras.

Yes, other markets are catching up, especially Gurgaon. A 10,000-square-foot apartment in DLF’s Camellias project on Golf Course Road was sold for RS 100 crores, setting a new price record of Rs 1 lakh per square foot. 

Thus, Gurgaon might eventually give Mumbai serious competition, according to DLF’s Ohri. 

Godrej camps cannot compete for six years, except in the real estate industry

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Mumbai: Following a split in the 27-year-old locks-to-land development group, the Godrej family has agreed not to compete for six years, except in real estate. After the non-compete period, they can enter each other’s domains, but not under the Godrej name. 

As part of the family settlement agreement, Adi Godrej and his younger brother Nadir will be granted exclusive rights to use the Godrej brand in FMCG (cosmetics, cleaning supplies, toiletries, foods, beverages), financial services, pharmaceuticals, diagnostics, and chemicals businesses. 

Their cousin Jamshyd and his sister Smita Crishna will have exclusive rights to use the Godrej brand in the defense, consumer durables, medical devices, construction materials, interior design, electric mobility, software services, and security product industries. 

However, both groups may use the brand name in the real estate development and marketing industries. Jamshyd and Smita have real estate interests through the unlisted Godrej & Boyce, while Adi and Nadir own the listed Godrej Properties. 

None of the Godrej group companies will have to pay royalties on the brand. The non-compete clause went into effect on April 30. The agreement states that after six years, “a family group can enter  into the exclusive business of the other family group, without the use of the Godrej brand including in their corporate names.” 

Both groups, however, can venture into areas where neither has a presence, leveraging the Godrej brand with group-level differentiators, as these have been designated as shared business spaces.  

For example, medical services, hospitals, hospitality and education. 

Non-compete covenants are common in family settlement agreements. 

In March, the TVS family agreed to avoid competition for a set period. 

From promoters to public shareholders. 

Once the ownership realignment in the Godrej group’s listed entities is completed siblings Jamshyd and Smita Crishna will become public shareholders. 

They are currently part of the promoter group for listed Godrej entities. According to Sebi regulations, if a promoter wishes to be classified as a public shareholder, they cannot own more than 15% of a listed entity. According to the family settlement arrangement, Janshyd and Smita, classified as promoters once the realignment is completed, will apply for it. 

What is the better long-term real estate stock to choose between Godrej Properties and DLF?

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With the real estate index plunging 125% over the last year, the market has experienced a notable upswing. It is possible to attribute this surge to high pre-sales numbers. In this context, let us compare the stocks of Godrej Properties and DLF to see which offers better long-term investment prospects. 

The real estate market has experienced a notable upswing in the last year, as evidenced by the realty index’s explosion of over 125 percent. Excellent pre-sales numbers from real estate companies are responsible for this increase. Real estate companies’ stock prices have stayed high, partly because they announced upcoming projects, encouraging pre-sales numbers and market expansion. 

In this context, let us compare the real estate stocks of Godrej Properties (GPL) and DLF to see which offers better long-term investment prospects. 

Trend of Stock Prices

To date this year, DLF and Godrej Properties have outperformed the benchmark. GPL has increased by 24% in 2024 YTD, compared to DLF’s nearly 29% increase. In contrast, Nifty has grown by 3%, while the Nifty Realty index has increased by more than 18%. 

Thus far in 2024, both stocks have produced positive returns in both months. DLF increased by 13 percent in February, bringing its winning streak to six months. In January, it increased by 9.7%. GPL saw gains for the fifth month in a row, adding 1.2 percent in February. It increased by about 18% in January. 

Meanwhile, DLF and GPL have produced multi-bagger returns over the past year. While GPL has increased by 114 percent, DLF has grown by over 159 percent. Conversely, Nifty Realty has experienced a growth of more than 125%, whereas Nifty has grown by more than 27%. In intraday transactions today, March 4, DLF and Godrej Properties reached their 52-week highs. On March 14, 2023, DLF reached its one-year high of Rs 932, surging 177 percent from its 52-week low of Rs 336.50. GPL also reached its 52-week high of Rs 2,524, rising 151 percent from its March 29, 2023, 52-week low of Rs 1,005. 

Meanwhile, DLF has come out on top over the next three years. While GPL is up just  67 percent, the stock has returned 194%. 

Earnings 

Due to increased revenue and decreased expenses, DLF reported a 27% increase in consolidated net profit to Rs 655.71 crore for the December quarter. Its net profit for the previous year was Rs 517.94 crore. In the October – December quarter of the 2023-24 fiscal year, total consolidated income increased to Rs 1,643.51 core from Rs 1,59 crore during the same period the previous year. Thanks to several launches throughout the quarter, DLF, the big real estate player by market capitalization, recorded its highest quarterly sales booking of Rs 9,047 crore. In addition to generating Rs 1,108 crore in operating cash, the company reported strong liquidity. 

In contrast, Godrej Properties’ net profit in Q3FY24 increased 6% YoY to Rs 62.47 crore. Revenues for the company were Rs 330.44 crore, up 68.39 percent. In the December quarter of FY24, the company achieved its highest-ever pre-sales, totaling Rs 5,700 crore, a 76 percent increase over the prior year. Eight project launches between October and December helped the pre-sales and accounted for about 69% of the bookings. According to the company, bookings for the nine months that end on December 31, 2023, totaled Rs 13,000 crore, or 93% of the company’s goal for FY 24. 

Which real estate stock offers the best chances for long-term financial gains?

Director and senior technical analyst Shhersham Gupta of Rupeezy favors DLF over Godrej Properties. 

Godrej Properties and DLF have cooperated on several projects for the past year, resulting in excellent outcomes. But of the two, the DLF is the most promising due to its ambitious project launch pipeline. DLF plans to significantly increase its operating flows and profitability, with planned launches having a gross development value (GDV) of Rs 32,000 crore, representing considerably more than previous years’ figures. 

Conversely, SAMCO Securities research analyst Moorjani believes Godrej Properties is more suitable. 

Both DLF and Godrej Properties are currently selling at ridiculous prices. Therefore, even though current owners may decide to hang onto their shares, new investors should steer clear of these stocks. Godrej Properties recently reported its highest-ever quarterly sales bookings for the second consecutive quarter. When it acquired a 12.5-acre plot of land in Hyderabad with a massive 3,500 crore revenue potential, it also caused a stir. Furthermore, contrary to many others in the industry, Godrej Properties has reported growth in its profits and revenue. Godrej Properties is an excellent option for investors considering its financial performance and potential for growth.  

In the interim, international brokerage firm Jefferies has called for a “buy” position in both real estate stocks. Godrej Properties’ target price has increased to Rs 2,700 (from Rs 2,635), signifying a gain of more than 7%. Conversely, the brokerage has already surpassed its target of Rs 875 for DLF. With two consecutive record-breaking pre-sales quarters and a robust launch pipeline for the fourth quarter, Godrej Properties expects to see at least 50% more sales growth this year. Due to the lack of noteworthy project deliveries during the quarter, its revenue of Rs 330.44 crore was below expectations. Worli (MMR), Ashok Vihar (NCR), and Sarjapur (Bengaluru) are just a few of the projects that GPL has said are probably going to be delayed. According to Jefferies on GPL, the launch pipeline for 4QFY24 is still strong, excluding these projects. A 15-year high quarterly profit, an all-time high in pre-sales, and more than Rs 1000 crore in free cash flow generation were made public for DLF in Q3. Additionally, according to the brokerage, DLF’s updated project pipeline indicates that launches for FY24 have taken place, but the pipeline for FY25 and FY26 has been steadily growing. It also added that the lease performance remained stable, with an 8% YoY rental growth.   

Yet, CLSA has a “sell” call on both equities. 

Ultimately, buyers and sellers of real estate need to consider these divergent viewpoints and carry out their due diligence. 

Note: These are the opinions of individual analysts or brokerage firms; Propertywala does not endorse any of the ideas or opinions expressed above. Before making any investment decisions, we advise investors to consult with qualified specialists. 

Godrej Properties to Raise Rs.700 Cr, Targets Growth

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Godrej Properties, the real estate wing of Godrej Group, has announced its plan to raise Rs.700 Cr. The fund will be raised through rights issue.

MUMBAI: The real estate wing of Godrej Group, Godrej Properties, has announced its plan to raise a fund worth Rs.700 Cr. The fund will be fully utilized for developing its new projects. Godrej Properties plans to raise the fund through rights issue.

Aiming growth and for developing more number of realty projects, Godrej Properties plans to raise Rs.700 Cr through rights issue. Continue reading →

Godrej BKC jointly launched by Godrej Properties and Jet Airways

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Partnering with Jet Airways, Godrej Properties will develop a commercial project in the Bandra Kurla Complex in Mumbai. The airline and the realty firm will hold equal shares of the project named Godrej BKC.

Godrej will develop a commercial project named Godrej BKC jointly with Jet airways.

Godrej will develop a commercial project named Godrej BKC jointly with Jet Airways.

Real estate wing of Godrej Group, Godrej Properties Ltd. (GPL) will launch a commercial project, named Godrej BKC,  in the Bandra Kurla Complex area. Jet Airways will partner with Godrej Properties for the development of this commercial project.

The construction has already been started and the project is expected to get over by 2015-end.

Pirojsha Godrej, the Managing Director and Chief Executive of GPL; while commenting on the project, said that the firm expects to create around Rs.3,500-4,000 Cr from the project. He added that the project will be completed within two to three years.

However, he kept his lips crossed when asked about the financial details of the project. So far no financial details are available.

The cost will be borne by both Jet Airways and Godrej Properties equally. They will have 50 – 50 share in the project named Godrej BKC. Jet Airways has already reserved 2.5 lakh sq. ft. of office space in the project. The total salable space in Godrej BKC is 1.3 million sq. ft. Continue reading →

After September 2010, Godrej Properties Posts Its Worst Ever Quarterly Performance

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Godrej Properties,  part of the Godrej group and one of the most promising Indian real estate companies, posted its worst ever quarterly performance after the September 2010 quarter when compared year on year. The company has registered a subdued growth of 8% in its consolidated net sales and 17.4% drop in operating profit. The company’s performance was impacted by subdued sales volumes, weak operating margins and a slowdown in execution. Over 60% of its total income during the quarter was accounted for from projects connected to group companies. The remaining projects earned a negligible margin. Certain commercial projects were sold below the break-even cost leading to drop in margins.

Cost escalation and higher share of minority interest also impacted the company’s margins. Growth in sales volumes have not been very encouraging in its Garden City project in Ahmedabad which contributed 16% to the total income compared to 49% in the preceding December quarter. Net debt after excluding the money rose from IPP stood at 1554 crore leading to debt equity of 0.85. This is higher than the ratio of 0.55 at the end of the previous fiscal.

The company’s management though is optimistic about improving margins, ramping up execution and launching 17 new residential projects in FY13. Maintaining the health of its balance sheet is going to be a major priority. However for now, the stock is likely to see some more correction as the Street would knock off the premium built into the realty stock price on account of the company’s asset light model, good track record and reputation of its promoters.

Assotech and Sunapollo to Build Rs 500cr Housing Project in Gurgaon

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Real estate Company Assotech and private equity firm Sun-Apollo Friday announced the development of a housing project in Gurgaon at an investment of about Rs 500 crore over the next three years.

Sun-Apollo Real Estate Advisors has invested Rs 75 crore to pick up nearly 50 percent stake in Assotech’s subsidiary firm which would develop this project. Assotech has infused Rs 76 crore for nearly 51 percent stake in the subsidiary. “We are entering into the Gurgaon market by launching a 12-acre housing project in partnership with Sun-Apollo. This is our first project to receive private equity investment,” Assotech Managing Director Sanjeev Srivastava told reporters.

The project, which is located on Dwarka Expressway, has been launched at a price of about Rs 5,000 per square feet. He said the company has bought the licensed land where it would develop about 580 apartments, 23 villas and 102 flats for economically weaker section. “The total investment in this project ‘Assotech Blith’ would be about Rs 500 crore including the land cost over a period of the next three years,” Srivastava said.

The investment would be met through equity contributions from both the partners, bank loans and advances from customers against sales, he added. Sun-Apollo Principal Alok Aggarwal said: “The two partners are committed to invest more if required for construction activities”. The private equity firm has also invested in real estate projects of Parsvnath Developers and Godrej Properties in north India. “We will do more projects with Assotech in future if there is good opportunity,” Aggarwal said.

Assotech is currently developing many housing and hotel projects in the National Capital Region (NCR), Uttar Pradesh, Odisha, Uttarakhand, Madhya Pradesh and Bihar.

“India is a top focus for Realty Moghul” says Trump Scion.

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Trump’s eponymous real estate group expects to sign multiple deals for Indian residential projects and hotel contracts over the next five years, despite a market riddled by regulatory uncertainty and bureaucratic red tape.

“India, among other emerging markets, is the biggest push for our organisation,” Donald Trump Jr, an executive vice president of The Trump Organization, said on Wednesday.

Trump, whose portfolio includes projects in South Korea and Turkey, in addition to hotels and skyscrapers in the United States, is close to signing a couple of deals with Indian developers, the younger Trump said without providing details.

“Equity investment will depend on individual projects and partnerships but first we would like to form relationships which allow us to understand the processes and spectrum better,” the 34-year-old said on the side-lines of a hotel conference.

The developer entered India last year with a joint venture partnership with Rohan Lifescapes to build a 45-storey luxury residential tower in Mumbai.

However, work on the tower, which will bear the Trump name but involves no equity from the U.S. developer, has been halted for about nine months since authorities said it lacked the necessary permits, a common problem in an industry wrapped in red tape.

Indian developers are often hit by changing regulations. In Mumbai, for example, the scrapping of a rule granting extra floor space in exchange for providing public parking facilities has meant many projects must reapply for clearances.

But Trump, whose father is worth an estimated $2.9 billion, according to Forbes, says the lure of an emerging India outweighs the regulatory headaches.

“The Indian market is starved for a good luxury product and it needs a brand like ours,” he said.

“I like the regulatory changes I am seeing. It may slow things down a bit but will create a level playing field and will help in eliminating the unknown for an outside investor coming in,” he said.

The company plans to focus expansion in the country on luxury residences and hotels, and would look at cities including Mumbai, Delhi, Bangalore and the state of Goa.

Some local players such as privately held Lodha Developers and Godrej Properties are emerging as strong brands in India’s luxury housing space, but the market remains fragmented.

And despite a slew of interest rate hikes that have cooled India’s overall property market and hit luxury developers particularly hard, Trump is bullish.

 

CEOs plan for modest hikes this year

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Sobha Ivory, next phase of Sobha Carnation, Kondhwa, Pune 411 048: Elevation
In India, it seems like real estate companies are following a different trend for compensating their top management. During 2009, many company CEOs took massive pay hikes, but now they have chosen to either forego their hikes, or at least take modest ones this year, when the sector is doing much better.

Last year, CEOs of few companies like HDIL’s Sarang Wadhawan and Unitech’s Sanjay Chandra came under scathing criticisms from the media. It is hard to believe that in the recession time period of 2008-2009, Chandra got a raise of about 60% whereas Wadhawan got an increment of a whopping 200%.

However, this year the story is quite different. Wadhwan and Chandra both are somewhere at the same salary levels as previous year, thus Unitech’s MD annually earns Rs 1.71 cr. and Rs 6 crore for HDIL’s Wadhawan.

Other than these CEOs, JC Sharma of Sobha Developers took a 25% increase this year, quite modest one. Also, the MD of Puravankara Projects and Godrej Properties, Mr. Ashish Puravankara, scaled up by about 43% annually.

Godrej Properties have debt equity ratio of 0.5: 1

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Dubai skyline, Emirates
Last Monday, Adi Godrej, Group Chairman of the realty developer Godrej Properties admitted that on June 30, their net debt was reduced to Rs. 4 billion. He added that the balance sheet is really comfortable with the debt equity ratio of 0.5: 1.

As per the data revealed by Managing Director of Godrej Properties, Milind Korde, there was a net debt of Rs 4.50 billion on the company in the end of the financial year 2009.

In December, Godrej Properties which is a unit of Godrej Industries was able to raise around 100 million dollar through its Initial Public Offering (IPO).The share of firm closed at Rs 690.40 per share which is a decline of 1.69%.

Residential Project in Gurgaon by GPL

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Lloyds Building - RRP
Godrej Properties are entering NCR with their first residential project in Gurgaon.  The project will be developed in partnership with Frontier Home Developers on an area of 1.05 million sq. ft. on nine acres of land.

Pirojsha Godrej, the Director of Godrej Properties Ltd. said on Wednesday that GPL is now operating in 11 cities including NCR.  The project is a residential one which includes flats and penthouses. The best features of this project are its flexibility with respect to various configurations, extensive green and open areas and cherry on the cake is that it faces a 36-meter wide green belt.

The project is located in NCR’s growth corridor and near NH-8. Some of the landmarks are the industrial township of Manesar, 20km from the Indira Gandhi International Airport, near Metro station.

13th India Realty Expo’10 A Success

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The India Realty Expo 2010 organized by the Maharashtra Chamber of Housing Industry (MCHI) in Dubai was a great success. It was the 13th year of the realty expo and 9th consecutive year of the expo in Dubai. The exhibition held from June 3, 2010 to June 5, 2010 saw a presence of total 2847 NRI’s. The event’s success can be contributed to the fact that the exhibitors were offering ready properties or possessions between 3-6 months.

The Exhibition was inaugurated by his Excellency Mr. Naresh Mehta, Consul Commerce of India, Consulate General of India, Dubai-U.A.E on June 3, 2010.

Eighteen leading developers and builders from India including Acme Housing (India) Pvt Ltd., Akar Creations Pvt ltd., Ashiana, Delta Group, Everest Developers, Godrej Properties Ltd, Hiranandani Constructions Pvt Ltd, Kolte-Patil Developers Ltd, Marvel Realtors, Nahar Group, Nyati Group, Our Town, Pathy Housing, Runwal Group, Rustomjee, Uma Constructions- represented by United 4 realtors participated in the exhibition.

Indian_Consulate_03_07_2010-36
Photo by vasofoto.comMr. Sunit Mantra, President MCHI said on the occasion, “Looking at the factors such as attractive prices of Indian Real Estate as compared to Dubai coupled with a lackluster trend in local markets there, turned out a bonanza for the Indian realtors exhibiting their properties in the Dubai exhibition with investors and genuine buyers visiting in large number this year.”
The Hon. Secretary, MCHI, Mr. Deepak Goradia said, “We have seen tremendous response and turnout for the exhibition this time. Projects in Andheri, Powai, Navi Mumbai, Kandivali, Borivali, Bandra, Ghatkopar, Thane from Mumbai and other cities such as Bangalore, Goa and Pune received a lot of enquires for residential flats. Quality of visitors was good and mostly they were affluent, focused and high end consumers. Moreover visitors showed interest in 2/3 BHK flats ranging from 60 lacs to 1 cr.”

The Indian Real Estate Industry has only reasons to cheer in the time to come.

35 Acre Land by Godrej for Development

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Chunk
April 17, 2010

Godrej Group, Mumbai’s biggest landowner, is likely to release by the end of this year in Vikhroli, a prime 35-acre chunk.
In the recent past, this could be one of the largest drapes of unencumbered realty hitting the market. In the eastern suburbs, most of the large industrial plots sold to developers over the past 10 years were between 5 and 20 acres.
In Vikhroli, it is estimated that the Godrej controls around 4,000 acres most of which is constituted of a huge mangrove sprawl. This mangrove sprawl is titled as the best preserved mangrove park in Mumbai by environmentalists.
On Tuesday, the executive director of Godrej Properties, Pirojsha Godrej revealed to Times of India that for mixed-use development, a big plan is being prepared. And it is being prepared by none other than architect Cesar Pelli.

Realty companies are back on track

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Emaar MGF, Godrej Properties, Lodha Developers, Sahara Prime City, Nitesh Estates and Sriram Properties will all hit the capital markets in the current year, declaring that the worst may be over for an industry that virtually cratered in the global economic storm last year.

With market conditions still tight, it will be tough for these issuers to demand substantial premium from investors. Looking at the present volatile market, it would be really difficult to predict the premium.

The last to be listed, Mahindra Holidays and Resorts, debuted on BSE 7 percent higher than its issue price. Godrej Properties, the real estate arm of the Godrej Group, plans to sell around 10 percent through its maiden public issue. Before that, the company will place a 3.5 percent equity with select institutions.

The IPO is expected to fetch the company anywhere between 450 crore and 600 crore rupees. It will use the proceeds for building low-cost housing. ICICI Securities and Kotak Mahindra Capital are the merchant bankers to the issue.