Millennium Post

Modi’s mission A house for every Indian

India is home to the second largest human population in the world and related essential lifestyle needs such as adequate housing and food supply — in which Logistics plays a major role — have begun to dominate the market sphere leading to fierce competition among the relevant players at both home and abroad. Housing is one such industry that continues to attract both buyer and seller alike in their needs.

While the sector still faces a perennial shortage despite the vast number of developers and builders emerging at all levels, Modi government has set an ambitious target of providing housing to all families in India by 2022 when India celebrates its 75th Independence day. The housing industry is therefore making all out attempts to woo the home buyers through attractive schemes while still making a tidy profit for themselves in the bargain.

While the government has estimated figures of upto nine crore housing units required to fulfill housing needs upto 2022, the need of the hour is for the government and the Reserve Bank of India (RBI) to take a view about the interest rates, while even developmental agencies need to drive up funding efforts,’ Shriram Housing Finance Limited (SHFL) managing director (MD) and cheif  executive officer (CEO) Sujan Sinha said while also urging for builders and financial agencies for doing away with mistrust between them and instead working together in regard to meeting housing development needs — specially of the ‘Underserved Sections of Society.’

To a question about how big the ‘Underserved Sections of Society’ market was, he told Millennium Post that more than 90 per cent of SHFL’s portfolio lay in ‘affordable housing’ with 75 per cent of it in the priority sectors itself. ‘While no venture can be sustained without profitability, we are looking at all means to keep our interest rates under control, since the home buyers come from the underserved sections of society,’ he said while mentioning some portfolio-related cases that included a flower-seller, an astrologer, a watch shop owner, and even a security guard and his nurse wife —whose total combined salary came to barely Rs 5,000 per month even as they desperately searched for housing of their own.

To meet the needs of the underserved sections of society, SHFL brought out several innovative mortgage products under the philosophy ‘Finding Ways to Funding Homes’ to provide financial assistance to prospective homeowners who remained underserved even today, he said while noting that the company’s home loan book — which began its lending operations since December 2011 — is in excess of Rs 400 crores and is expected to double in the current financial year.

‘The focus is on affordable home loans to address the needs of the not-too privileged people who are looking to own homes, especially in the smaller cities and towns of the country,’ he said, while emphasising that SHFL’s persistent high operating standards would foster confidence in housing finance system in India.

To a question about the finances of these customers in repaying the home mortgage loans, Sinha said that 17 per cent of cheques received by SHFL used to bounce. ‘However, our collection efficiency is 90 per cent and we do not believe in civil suits but rather in arbitration and convincing the customers through sitting and talking to them,’ he said while posing a visionary question ‘Can we encourage solar power as part of CSR? For this somewhere builders have to come in.’

Meanwhile, where housing development is concerned, women and  senior citizens have bid for over 90,000 bonds in the retail investors’ category in DS Kulkarni Developers Limited NCD Issue, besides 96 per cent of the issue being subscribed as of 20 August. The lead manager to the issue is SBI Capital Markets Limited. The attractive feature that is drawing women and senior citizens is that there is no TDS if bonds are held in demat account, which is very useful to senior citizens and women because their overall income is generally below taxable limits. This is the first ever secured NCD public issue by any real estate company in recent times and is significant in terms of deepening of the bond market, according to DS Kulkarni Developers, which is one of the leading real estate development and construction companies primarily focusing on development of residential units in the city of Pune with presence in Mumbai, Bengaluru, Nasik and New Jersey, USA.  The company is developing the DSK Dream City, — an integrated township spread across 217.90 Acres of land at Pune-Sholapur road near Pune – in several phases that includes residential apartments, commercial and retail space, facilities for various sports like tennis courts, cricket, football, athletics and sports stadiums, high street markets and malls, besides four exclusive zones being proposed namely: Knowledge Centre, Leisure, Culture and Well-being.

 The logistics industry in India, which is host to the world’s second largest human population, too offers vast opportunities for its instruments of delivery in catering to the needs of both players in the supply and demand sectors. With the product segment ranging from dairy products including butter and cheese, ice-cream, ready-to-eat/ready-to-cook food, confectionaries including chocolate and baked products, fruits and vegetables, healthcare and pharmaceutical products, and industrial products such as x-ray, photo-imaging and films, Logistics becomes a crucial player in transportation of such goods to their destinations without any loss in delivery time or materials. However, even more important is the role played in this regard by ‘Integrated Temperature-Controlled Logistics Service Providers’ with ability to service customers on a pan-India basis, through 1) Temperature controlled services and 2) Ambient distribution, where warehousing solutions cover the entire spectrum of temperature ranges from ambient to chilled and frozen (i.e. +20 degrees C to -25 degrees C).

The logistics supply industry is looking at catering to a supply/consumer market conservatively worth around Rs 12,000 crore to Rs 13,000 crore of which between 80 per cent to 90 per cent is the supply of onions and potatoes, besides ice creams, chocolates and even enzymes,’ according to related sources. One such logistics player stepping forward to fill the breach and also bag a chunk of the India’s massive logistics market in this context is India’s own Bengaluru-based Snowman Logistics Limited, which is eyeing its home country for its IPO offering of 42,000,000 equity shares at Rs 10 each by 28 August this year through HDFC Bank as its ‘book running lead manager to the issue’.

Snowman’s investor profile includes international players like Mitsubhishi Corporation, Mitsubhishi Logistics Corporation, International Finance Corporation and Norwest Venture Partners VII-A Mauritius, according to the company’s Chairman Gopinath Pillai.

To meet the demands of this perishable goods sector, Snowman has stepped into the logistics sector with its blast-freezing facilities at temperature-controlled warehouses in Bengaluru, Mevalurkuppam
(near Chennai), VIsakapatnam, Serampore (near Kolkata), Taloja (Near Mumbai), Ahmedabad, Palwal (near Delhi), Mubarakpur (near Chandigarh) and Surat. By 31 March, 2014, its operations comprised 23 temperature-controlled warehouses across 14 locations in India, besides operating 370 reefer vehicles consisting of 307 leased and 63 owned vehicles,’ notes Ravi Kannan, (CEO & Director).

Meanwhile, tourism — which is dependent on both the housing and logistics industry – too is on the upswing in India with number one tourism generator, Gujarat Tourism,  highlighting its continued rise in India’s tourism efforts while contributing to the tourism coffers by registering a 13.3 per cent increase in domestic and foreign tourist arrivals with 287.88 lakh visitors during 2013-14, compared to tourist flow in 2013-13. Domestic tourism outpaced international tourism growth in India with Maharashtra being the top among states by providing 37 per cent (22.47 lakhs) of the country’s tourists to Gujarat in the last financial year, according to Kamlesh Patel, Chairman, Tourism Corporation of Gujarat Ltd.

Sanjay Kaul, MD TCGL, said that the Gujarat government is investing heavily into tourism and Rs 650 crore have been allocated for development of the Gujarat Tourism sector which included projects for 2014-15 such as: Eco-tourism (Rs 113.29 crore) areas like Velavador, Saputara, Jessore Hills etc; Coastal development (Rs 20 crore), and wayside/other infrastructure (Rs 1371.75 crore.

Pointing out that public conveniences for tourist needed to be strengthened, he said that around 50 locations on the Gujarat highways would be having these facilities. While hotels in the State today comprise of 65,000 rooms, these still remained insufficient to meet the present needs which would now be met through ‘Home Stays’ registration that would be launched soon. ‘There has been a 300 per cent to 400 per cent increase in tourists coming to Sasan Gir (the lone abode of the Lion in Asia)in Gujarat and we are starting Home Stays there in view of the September to February season that witnesses a dearth in rooms for visitor accommodation,’ he said.

Kaul also highlighted the International Conference on Sustainable Tourism (to be held on 27 September, 2014) in Gujarat which would focus on the planning trajectory of tourism growth by involving brainstorming between investors in the state. Gujarat has the largest number of wildlife sanctuaries — including bird sanctuaries — in the country and the tourism department is eyeing development of eco-tourism properties —such as tents, wooden cottages and log huts — run by the government with the expertise of the private sector.
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