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Lodha Group’s Q3 sales don’t match industry figures

The developer has claimed sales figures in the third quarter of this fiscal which are almost equal to the sales figures of entire Hyderabad city for the same period

Real-estate developer Lodha Group claims to have sold approximately 4,000 units in the third quarter of FY10 according to industry analysts. Ironically, the sale reported by the developer is equal to the figure reported by entire Hyderabad city in this quarter.
 
Lodha’s numbers have been questioned by industry experts. Earlier in 2007, the group launched a luxurious residential complex named ‘Lodha Aqua’ at Dahisar in suburban Mumbai.

The developer claimed that on the very first day of the project launch, it sold 300 units at Rs5,850 per sq ft (comprising two bedroom, hall & kitchen (BHK), with an area of 1,017 sq ft and 3BHK with an area of 1,395 sq ft). In December 2009, the group jacked up the price for the project to Rs6,399 per sq ft. However, in 2010, the developer is aggressively advertising the same project as a fresh one.

If the developer has already sold 300 units on the first day of the launch three years back, why is the company spending so much on advertising? The group is busy coming out with full-page advertisements and is booking prime advertising time on various channels to promote the project. Moneylife sent an email to the company on the issue. However, it remained unanswered until Monday evening.

During the third quarter to end-December, the real-estate industry has reported sluggish sales in Mumbai. In Mumbai and Delhi, the major real-estate markets in the country, there has been very little movement during the quarter. “Rents in the NCR further depreciated to reach their lowest level in the past two years, which also provided an impetus for corporates to lock in leases at existing rents,” said Jones Lang LaSalle Meghraj in a report.

Despite the quarter falling in the festival period, Mumbai reported lower sales as developers spiked prices. The increased property prices made actual end-users withdraw from the market. According to an industry expert, during the third quarter, property sales in Mumbai fell by around 20% compared with the previous quarter.

Most of the real-estate companies that faced a severe liquidity crunch in September 2008 have raised funds and de-leveraged their balance sheets. A spate of events since January 2009, starting with an RBI debt-restructuring package for real-estate companies, asset sales and fund-raising from capital markets have alleviated the liquidity concerns for the sector.

“Amid a slow revival in the residential segment and a nascent commercial space recovery, we are underweight on the real-estate sector over the medium term. Though liquidity has improved for real-estate players, growth and valuations remain a concern in (the) medium term,” said ING Investment Management (India) Pvt Ltd, in a report.

With ample availability of funds, realty developers did not bother to cut property prices as expected by the central bank. This has resulted in erratic monthly sales. The sector showed signs of some recovery after July 2009. However, after that, sales dropped due to stiff property prices. The zigzag movement of real-estate sales is slowly mirroring the situation in 2008, when it was hard to report sales by the industry, concluded an industry insider.
 

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COMMENTS

Abhishek Dutta

7 years ago

It's not new that the lodha group has been lying to its customers, I've booked a flat in Lodha Aqua in the month of April 2009 and was promised posession by the month of June 2009 initially, I've a pre sanctioned loan from LIC, The builders representative have been sending multiple claims till plaster since April 2009, in September when the evaluator from LIC visited the site he found out that the claims raised by Lodha was false and cleared payments only till slab 12, the Lodha Group again raised a claim in December till plaster, the evaluator again found this to be a false claim and did not clear the entire claim raised by the builder. on top of this the lodha group has been forcing me to pay an extra interest charge on the balance amount not cleared by LIC housing finance for around INR 80000/-because LIC is not clearing the payments citing false claims from the builder's end. A cheque from the LIC housing finance after the new claim has been ready since more than two weeks now but the lodha group refuses to recieve the cheque until I pay the interest charges levied on me forcefully.

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Magma HDI insurance JV appoints Swaraj Krishnan as CEO

Krishnan will look after the expansion of Magma HDI across India and will be responsible for overseeing all business operations

Magma Fincorp Ltd, a retail finance company, has appointed Swaraj Krishnan as chief executive officer (CEO) of its insurance joint venture Magma HDI General Insurance Co Ltd (MHGIC).

MHGIC is a joint venture between Magma and Germany’s third-largest insurer Talanx group’s unit HDI Gerling.

Earlier, Mr Krishnan was CEO of Bajaj Allianz General Insurance Company. Mr Swaraj joined New India Assurance in 1981, and was with the company for two decades. He has 29 years of experience in insurance.

Magma, a non-banking finance company (NBFC) with Rs9,390 crore assets under management (AUM), provides financing of utility vehicles and cars, commercial vehicles, construction equipment, tractors and loans for small & medium enterprises.
 

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COMMENTS

KRajendran

6 years ago

Congratulations on Magma HDI obtaining R 1 licence from IRDA.With Mr.Swaraj Krishnan as CEO and with Magma's high degree of business ethics I am sure the company is bound to achieve many alaurel in the insurance world.

satyam roy

7 years ago

Expecting you will take off MHGIC in such lebel where sky is not the limit with your previous experience........

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