Published by yourcollegebars on May 2, 2017

A sound Paranjape Schemes is a golden goose whose time has come

 

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Once a sleepy city, better known for its retiree popula­tion, Pune has now found its mojo in IT. That said, apart from the city’s growing significance as an IT hub, Chakan’s growth as an automo­bile hub in the neighbourhood, and the growth of food-processing indus­tries in the surrounding areas has also bolstered the demand for resi­dential, commercial and office space in the city in the last decade.

Cashing in on this trend, sev­eral developers have grown in size and acquired a reputation as quality builders. One of the leading develop­ers in this pack has been Paranjape Schemes (Construction) Ltd (PSCL), which-was set up in 1987, by the two brothers, Shrikant and Shashank Paranjpe, chairman and MD of the company, respectively.

PSCL has come a long way since inception. With the filing of a Draft Red Herring Prospectus with the SEBI on 9 July, its shares are destined for listing on the NSE and BSE sometime in the near future. The company will be raising ?600 crore through an IPO. Though the date has not been announced so far, it can’t be too distant.

Traditionally, Paranjapes have been a business family. Grandfa­ther Vishnu Paranjape was a manu­facturer of silverware in the 1920s. To his credit, he foresaw the poten­tial for development of real estate in Mumbai and invested profits from this business in large tracts of land in Vile Parle (East). This laid the founda­tion for the next generation to enter real estate development.

Interestingly, one of Vishnu Paran- jape’s first acts in developing his property was to establish Parle Tilak Vidyalaya in 1921. This is now a lead­ing educational institution in the metro. After inheriting the property,

AUGUST 31-SEPTEMBER 13, 2015

the promoters’ uncle Moreshwar Paranjape and their father Purshot- tam Paranjape targeted the housing needs of the middle classes in the western suburb of the metro.

Thus, they subsequently devel­oped the entire estate into, what in today’s parlance can be called ‘an integrated township’. It gave them the reputation as reliable build­ers. However, Shrikant – who had just completed CA in 1983, and his younger brother Shashank – who was still doing his articles, decided to launch their own venture, separate from the family’s real estate business. They instead went into manufactur­ing adhesives for wood in 1983.

With intense competition and small operating margins, adhesives turned out to be a challenging task. Nevertheless, they stuck it out for several years, expanding success­fully from a small manufacturing unit in 1983 to three units in 1987. “It taught us to value customers,” reminisces Shrikant.

However, they decided to look for better opportunities; and, what else could have been better than the real estate business? By virtue of being in a family of developers, they already had some familiarity with the field. They sold their adhesives business and invested the capital raised from this sale into a realty venture, call­ing it Paranjape Schemes (Construc­tion) Pvt Ltd. “We may have sold adhesives,” says Shashank, “but it
Responding to the Central Govern­ment’s National Policy for elders in the country, Paranjapes have formed a non-profit charitable organisation, Athashri Foundation, under Section 25 of the Companies Act, 1956. The foun­dation has been pursuing a two-pronged approach in meeting the needs of its senior citizens. One of these has been to assist them whenever needed. The other has been to make their lives happy and comfortable, by paying attention to their age-specific physical and psychological needs. All Athashri schemes have been developed on this theme, in association

gave us the confidence to face chal­lenges in the rapidly changing realty market after the opening up of the Indian economy”.

So, where does PSCL stand in India’s real estate scenario after nearly 28 years in business? From being principally a Maharashtra- based developer, it has expanded to Bangalore and Baroda and has now begun exploring opportunities else­where as well.

An amazing aspect of Paranjapes’

Financials

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Total income ^Profit Before Tax

 

2014 2015

 

 

approach, unlike other develop­ers of Pune or, for that matter, even Mumbai, has been their boldness in exploring opportunities even in smaller cities like Kholapur, Nashik, Chiplun and Ratnagiri. This open- mindedness in tapping opportuni­ties is what has distinguished them from others in the field.

Paranjapes began with a focus on mass housing in 1987, which was

with Paranjape Schemes and Athashri Homes Pvt. Ltd.

Beginning with Pune, the company has now expanded its footprint to Ban­galore and Vadodara, in Gujarat. In Pune alone the Athashri Foundation has been taking care of 1095 senior citizens. Having set this benchmark in these cit­ies, Paranjapes’ ultimate aim is to have Athashri projects in all major cities of India in the coming years.

“The average age of residents at this complex is 78,” says Hari Sundaresh, 71, a former World Bank Employee, who met this correspondent at one of the

 

the sole segment of opportunity then. Today, they have diversified into various segments of real estate development, including mass-hous­ing projects, residential schemes for the elderly and lifestyle projects for those who can afford this.

As for the scale, they have large projects like the integrated town­ships and relatively smaller ones like the redevelopment schemes. On the commercial side, they are at present setting up a special economic zone, an IT park, malls and hospitality proj­ects like hotels. In fact, they already have a management tie-up with the Taj in the city.

Over 28 years, PSCL has com­pleted 160 projects, covering about 15.33 million sq ft of developed area – comprising 12.99 million sq ft of residential and 2.34 million sq ft of commercial space. Besides, it has sev­eral ongoing projects, while several more are at the development stage and some in the pipeline. These will form the bulk of the revenue in next few years.

As far as Pune is concerned, the developer’s focus was on Kothrud, Deccan Gymkhana and Pashan Sus road, in 1988. But, with the passage of time, as these areas were saturated, it shifted its focus to Western and South­ern Pune, where all the action is now.

To its credit, PSCL has been instru­mental in developing Hingewadi, where it has an iconic township proj­ect, Blue Ridge. This is now one of

Paranjape’s Pune Athashri complexes. “There are three to four interesting events every month besides several other programs, which keep us engaged.”

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