Page 19 - Forbes - India (January 2020)

macrotech developers

Delhi-headquartered realtor was
The Lodha stressed with nearly `23,220 crore
World
Towers is in net debt and had started paring
a luxury
project in its national footprint and debt; that
Mumbai provided Lodha the opportunity to
fuel his ambition of transforming
Mumbai’s skyline with a canvas
of skyscraping luxury towers. Joshua navalkar
The construction of Trump
Tower is now complete, Lodha has
sold 80 percent of the project, with
451 apartments of 2,222 yet to be
sold. That may not be a problem.
There are other dangers: Of looming
debt, downgrades by credit rating “Last year our cash
agencies and an all-important US flow was 54 percent
denominated bond that comes up
for redemption in March 2020. of the total cash
Sitting in the meeting room of flow of the top 10
Lodha World Towers—the one listed developers.”
cheek-by-jowl with Trump Tower—
the 39-year-old Lodha shows abhIShek LODha,
few signs of stress: “Ultimately managing director and ceo,
the proof of the pudding is in the macrotech developers
cash,” he says with a smile. He’s
confident of being net debt-free 19
“in the next 24 to 30 months”.
At the end of March 31, 2019, the
consolidated net debt of Macrotech economic interest of 76.25 percent
Developers stood at `24,983 crore and 78.63 percent, respectively (as
and it posted negative net cash flows per a draft red herring prospectus
as it ploughed back `1,729 crore the company filed before a planned
for its overseas project. And then public issue in 2018). It has completed
there are the downgrades, which one project and the other one is a
began at a business in London. few months away from completion.
In 2012 and 2013, the Lodhas As per Macrotech’s FY 2019 annual
had begun to look overseas for land report, it sold 158 units in its London
parcels. After scouting cities like properties for £468 million (`4,349
Dubai and Singapore, in November crore). According to rating agencies,
2013, they decided to buy their debt sanctions for Lincoln Square
first property in central London, and 1 Grosvenor House stand at
MacDonald House, for nearly £290 million (`2,695 crore) and £517
$530 million (`3,000 crore then). million (`4,803 crore) respectively.
Abhinandan Lodha, Abhishek’s Lodha says it has since sold
younger brother, was in charge of the units worth more than £600
project. In February 2014, the Lodhas million and expects to sell out both
acquired another property on Carey projects over the next 18 months;
Two years before, in 2012, Lodha Street for nearly `920 crore. By 2015 the company expects free cash of
had swooped in to acquire DLF’s Abhinandan left the company and about £550 million (`5110 crore)
land parcel in the Lower Parel went on to launch Lodha Ventures, the from these two developments.
neighbourhood of Mumbai called financial services arm of the family. Lodha insists it will be free cash
NTC Mills for `2,727 crore. Back Lodha Developers UK Ltd now after repayment of any liability.
then DLF was the largest developer consists of these two projects in The net margins on its London
by market capitalisation, but the which Macrotech Developers has an projects are around 20 percent.

january 31, 2020 • forbes india