Prestige Estates Projects Limited (PRESTIGE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Prestige Estate Projects Limited Q3 FY '22 Results Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Samar Sarda from Axis Capital Limited. Thank you, and over to you, sir.

Thanks, Peter. On behalf of Axis Capital, I once again welcome the senior management of Prestige Estates led by Mr. Irfan Razack, the CMD; Venkat, CEO; and Amit, the CFO. I also take this opportunity to congratulate them on a really strong third quarter FY '22 presales. With this, over to you, Mr. Razack, for your initial comments, please?

Thank you, Samar. Thanks, everyone, for joining in. It's always a pleasure to interact with you and answer whatever queries that you have or concerns that you have. As you already heard Samar saying, we've done the best ever sales in the quarter, which probably exceeds what we would have done 2 years ago in the full year. That's INR 4,200 plus crores. We are on course to [ reach ] INR 10,000 crores mark in this financial year. We probably thought we'll reach that number in 2025, but we're already achieving it now. But of course, having said that, it's a number that is very, very hard to sustain in the long term. We'll have to make sure that we have the right type of inventory all the time, every time, and the market also holds and sustains. It's been a dream quarter. The collections also have been really, really, really good. We've done almost INR 2,400 crores of collections. And I think overall, the teams are charged, and overall, the atmosphere on ground is very good. And this is without really Bombay kicking in. And Bombay sales, we are -- the teams are getting ready with all the necessary [indiscernible] and sales material. And we'll see the effect of Bombay only from April. And that effect will be very, very different. So it will be adding 1 more Bangalore there. So that's how the teams are. That's how we are working towards. On the other front, we have closed out our Blackstone transaction fully now. As of today, everything is done. With that, I think a lot of debt also gets off the balance sheet and makes us that much more lighter and gives us a strong partnership for future. We've got 3 under-construction assets with them, plus we are going to -- we have launched our -- opened our new hotel, which is the JW Marriott in Prestige Golfshire on 5th of March. So that asset is ready. Two more assets will be ready in the next quarter. That is the 2 malls, 1 in the Falcon City in Kanakapura road and the other in Kochi in Kerala. These 2 assets are also almost getting done. And these are, again, high-CapEx projects. So these also should get ready and start operations sometime in the month of May of 2022. Of course, the full occupancy and the full operations for these malls will happen sometime in September, October, but we -- it will be a start. We're also now getting ready our small 1 more retail asset, which is about 0.2 million square feet, which is Forum Rex Walk in Brigade Road. It's a prime locality, and the rents are high. So even that is substantially revenue will come from there. So with this, I believe that we have -- looking forward to good few quarters in the same way. And I think even at, what we call, at the financial level, we are working to see that our bottom lines are protected in spite of the costs in escalations, and we should be doing well. Office has been doing well, too. Office, whatever we have inventory is getting more or less leased out, and a lot of new office is under production, which as and when it gets completed, will get leased out. With this, I hand over to Venkat to give his comments.

Thank you, sir. Thanks, Samar. Thanks, everyone, for taking time out to be in post-results conference call. Yes, it's been a dream quarter with sales increasing by 111% year-on-year. Our 9-months sales with the robust Q3 sales stand at INR 7,113 crores, up by 97% compared to the previous quarter. We sold around 10 million square foot of area at INR 6,961. The collections for 9 months stand at little over INR 5,000 crores, up by 51%. And overall, we've launched close to 8 million, 9 million square foot, 9-month figure is 11.76 million square foot and compare to 10 million square foot. So that's been the operational performance in terms of launches, completions, collections and sales. It's been a fantastic quarter. This quarter is also turning out to be good. We just had a launch of one of our developments, Prestige Marigold, 2 hours ago, and the response seems to be very good. So we're poised to end this year with a little over INR 10,000 crores of sales. That's the benchmark by sales. As Chairman said, we are working towards now -- that's the reason we're doing a detailed launch pipeline. Objective is going to be now launching new projects in various cities so that we sustain the number that we have reached -- going to reach this year. And of course, Mumbai and NCR, NCR is in last leg of approval. Once that's through, we'll be able to run the project. And Mumbai projects, most importantly the Prestige City at Mulund, it's been renamed, well, from Prestige Cosmos to Prestige City at Mulund. Prestige Daffodils at Pali-Hill and Prestige Ocean Towers at Marine Lines will get launched in the month of April. Contributions will start coming from that region as well. Currently, there's not much contribution in the sales from those 2 regions. Now moving on to the financial performance. Prestige had a total revenue of INR 1,396 crores. EBITDA is at 30%, and PAT is at 7.09%. 9 months as a whole, total sales have been at INR 4,261 crores, EBITDA at INR 1,264 crore, and EBIT and PAT margins are 30% and 7%. The debt for this quarter is at 0.57. I think previous quarter was 0.43, and there's a lot of discussions have happened with a couple of you offline. And one of the reasons for the increase has been some land payments and the premium payments that we have done during the month of December. And by end of this quarter, we look at debt equity coming back to 0.35 to 0.4 maximum, driven by the accounting impact of Blackstone Phase 2 transaction. We just completed the entire transaction now. The information is also now going to -- we intend to exchange this about signing our Phase 2 deal, out of which we will receive INR 500-plus crores of cash. And from Phase 1, we had INR 250 crores of money to be received [indiscernible] even that could come INR 750-plus crores of money. And accounting impact on that will be, because a lot of debt also will move out, will be a little over INR 1,300 crores to INR 1,500 crores. In addition to that, we also have ongoing one more [indiscernible] transaction. We are divesting our stake in Prestige Star Tech held in the PRESTIGE CITY PROPERTIES. We hold 50% of that entity, 51% of that entity. And the INR 2,050 crore, 2-0-5-0, is the enterprise value. We have 50% stake in that entity. So we are divesting the stake. And that will also get concluded in this month. So that impact also will be in the financials. Therefore, debt equity should be back to 0.3 to 0.35 in the coming quarters. That said, in terms of contributions to the sales. The major contributions have come from just-launched projects and also completed inventory. Prestige City has contributed significantly to the sales and also Prestige Beverly Hills in Hyderabad. And with this -- yes. So as I was mentioning, we have close to 30 million square feet of projects that are lined up for launches now, various stages of approvals in Mumbai, Bangalore, Noida, Chennai and Hyderabad. So we should be able to launch from 12 to 15 months from now, all these projects, one after the other. That's everything. And most importantly, we've been signing deals and entering into transactions in Mumbai. Just to ensure that you're all aware as to what we are doing in Mumbai, we have separately compiled and put up in the presentation this time around, in fact, Mumbai operations summary. I hope you had a chance to look at that and how it's going to help us growing in that market. That's in Slide #9. Except for Jeejamata Nagar, all other project summary has been given. But the total potential of Mumbai projects that we are doing is INR 42,365 crores. In that, our share is around INR 24,000 crores. So that's the total potential. And with this brief, I would like to open the forum for questions and answers. Peter, just open the questions -- open it for Q&A, please.

[Operator Instructions] The first question is from the line of Karan Khanna with AMBIT Capital.

Congratulations on a fairly strong quarter. So firstly, on your Mumbai project, you launched Prestige Jasdan Classic in the month of October. Can you give us some sense in terms of how the trends have been on the bookings and the overall inquiry front for the Mumbai project?

Yes. We did have a launch of Prestige Jasdan Classic. That's been doing quite well. I mean unlike what we do in Bangalore, so into first week of launch, we filled 50%, 60%. It's been a different market. We sold so far around 12 units, the total sale value is close to, but we'll do more, INR 70 crores.

A lot more.

So the teams are at it. We will be doing some good numbers this quarter. We'll keep you posted of its development.

Sure. And secondly, continuing on your real estate sales, you earlier on mentioned during the call that by FY '22 itself, you're planning to cross INR 10,000 crores of presales. In that context, what will be the sense on the updated guidance for FY '23 and '24?

No, no, we won't go to '23, '24. Now we'll restrict ourselves now to March. And March, hopefully, once we cross that target of INR 10,000 crores, we hopefully will not slide backwards. We'll go only ahead. But right now, the visibility what we have is for this. And of course, we have to see that more and more inventory and production comes. There will be a lot coming from different quarters, and I'm very, very sure that we'll surpass it, but we'll have to, again, do all our calculations. For the time being, I'll just keep myself for '22 March, and then we'll do a review once again in April.

Sure. And thirdly, apart from your already announced projects, can you give us some sense on deals which could be at the evaluation stage under the DB Realty platform? And also, what could be the rationale behind the promoters participating in the fundraising for DB? And does this give better control on execution or first preference to Prestige for further deals?

Yes. Actually, deals, whatever we have done with DB, we have done 5 deals. One is the Ocean Towers, Marine Lines. The second is Liberty Towers, Mahalaxmi. The third is BKC 101 Phase I and Phase II. And then there is Jeejamata Nagar, which is, again, a long way to go. But these 3, which I told you earlier, all ready. Fourth one will take time. And there is one which we are doing in the Aerocity, in Delhi, this hotel and the office. Right now, this is what we are doing. Yes, we -- in spite of once we've invested there, I think Venkat will update you more on that. But it does give us an edge over whatever else. But there's no sort of exclusive rights if you're asking me. It's an open field. We also evaluate anything case to case. And there's no compulsion either on them or on us to take any deals that DB brings us or either a way that DB can't give to anybody else. It's an open market. In fact, one of our peers also wanted to join in, and DB asked us, and we said we are totally open for it, and you may proceed with whoever you wish. It's just another thing that it got pulled out, but that's a separate story. I don't want to comment on that. Venkat will update you on the rationale behind us investing in the family office investing in the company itself.

Given the relationship that we have with DB currently, which is very large, and we started and there are commitments and obligations deliverables from DB as well. We thought it's pertinent to be part of that entity and help navigating DB also towards honoring the milestones and whatever that needs to be done to ensure that [indiscernible], Prestige Estates and DB Realty projects overall move faster and have been moving very fast. If you see BKC 1, BKC 2, we have started work. Liberty Towers, we have broken the ground. Work has already commenced. Ocean Towers, we'll do it in April, been going very well. And we thought it's good to be part of the entity and ensure that there is a synergy in working together.

Sure. And lastly, if I can just squeeze in one more question. Our on-ground checks and there's a media article as well that suggests that Prestige Group has acquired TVS's Anna Salai property in Chennai. So would you want to comment on that? And what could be the development potential for this? And as an extension, how much capital do you plan to deploy for this expansion?

News article is not true. We're not pursuing that property.

The next question is from Adhidev Chattopadhyay from ICICI Securities.

Venkat, if you could share with us the usual cash flow reconciliation we do every quarter on the construction spend across various segments?

Sure. Just give me a moment. So this quarter on construction, we have spent INR 1,133 crores. Towards residential INR 740 crores. And towards commercial office space CapEx, around INR 170 crores. And retail CapEx, INR 65 crores. And hospitality, INR 158 crores. Overall INR 1,134 odd crores of money was spent in the construction. In addition to that, towards land, premiums and all of that, we have incurred around INR 1,355 crores.

INR 1,355 crores. Is that number correct?

INR 1,355 crores, yes.

Okay. And sir, okay on this. And could you just share the Prestige side of rental income for the quarter? I know you have done that deal with Blackstone, but can you just share the Q3 number?

So overall, I think our rental income post the Blackstone transaction would be, an exit rental basis, if you look at this year, would be around INR 250 crores to INR 300 crores.

Okay. INR 250 crores by March '22?

March '22, between INR 250 crores to INR 300 crores.

Okay. Okay. Okay. Sir, next question is on this Blackstone deal and this stake dilution [ to a P fund ] you mentioned. So if I understand correct, from Phase 2, INR 500 crores, INR 250 crores from Phase I, so INR 750 crores comes in from Blackstone deal. Plus additionally, INR 1,000 crores would come in from us diluting 49% in Star Tech, another INR 1,000 crores...

INR 500 crores of net cash, INR 500 crores will go in terms of debt.

In the Star Tech?

In the Star Tech, yes.

Okay. So totally okay, inflow, okay.

[indiscernible] INR 2,050 crores is enterprise valuation, INR 1,100 crores is the debt. So out of the equity value, 50% of it will come as a cash.

Okay. Okay. 50% will come as a cash Sir, and my final question, sir, could you share for this quarter, what is the sales from Prestige City? I mean how much have we launched? I believe it was 5 million square foot of launch. If you could just, how do you say, confirm these numbers? And in Prestige City, what is the banner residual area which you can launch and what is the launch pipeline? Are you expecting launch again in Q4?

Enough to be launched. And the overall sales from Prestige City alone, so INR 1,800 crores.

Sorry, sir, how much have we booked?

INR 1,800 crores.

Okay. INR 1,800 crores. Okay. Sir, and what would be the launch -- total launch value out of the INR 1,800 crores? 60% you have sold, is that correct, out of -- 3,000 you have launched? Or...

Which one, the Prestige City, how much we have launched? And what is the balance to be launched?

No, no, there's a lot more to launch. We've only launched about 3,000 units out of the 7,700 units in Prestige City. Right now, we have launched 2,200 units in Eden Park and 960 in Avalon Park. These 2 put together comes to about 3,200. Out of this 3,200, we've already sold 2,000. We've launched the villas, 149. We have sold all 149. And then, of course, the plots got sold out in the previous quarter itself, that's 800-odd. There is another 4,000 units, which is there, which we will be launching 1 in this quarter. And then there's 1 more, which will happen depending on how the response comes from Meridian Park. We also have 1 more call -- the 1 more, last this thing is there, which is again under redesign, which will happen at least subsequently.

Okay. Sir, just as a housekeeping. Prestige City, the share we have, 60% odd, is the revenue share, or it is a profit share? If you could just remind us what is the arrangement?

It's owned by Prestige Projects Private Limited, which is a total equity. In that, we have 60% PEPL.

60% is held by PEPL. So it's an equity holding that we have. Sorry, I just want to correct the number that I've given you earlier in terms of Prestige City sales. Including the project development of Prestige Great Acres, overall sales are INR 2,500 crores.

But that happened in the previous quarter, the Great Acres.

In the plotted development sales, in Prestige City, the overall contribution of Prestige City is INR 2,500 crores.

Okay. For Q3?

Yes. For Q3. And the total rental, exit rental income would be between INR 350 crores to INR 400 crores.

Okay. INR 350 crores, INR 400 crores. Okay. Sir, just sorry again for pressing. Just can you tell us this Prestige City we are owning, 100% of cash flows come to the listed entity? Or -- I just want to clarify that.

It does come for consolidation, yes.

Okay. The entire 100%. The 60% plus 40% both, the entire...

Comes for consolidation, yes.

[Operator Instructions] The next question is from Parikshit Kandpal with HDFC Securities.

Irfan and Venkat, congratulations on excellent quarter. So my first question is on the Mulund project. So any reason why we have changed the name? How will this project differentiate itself in an oversupplied market like Mulund? So if you can throw some more light and why there was a delay in launch of this project?

Parikshit, thank you. And see, originally, the way we wanted to do the project versus now what we have in mind is completely different because of the change of plans. This product only has become better. So Irfan sat through the entire presentation, he didn't like what had been done before. So he said we need to bring in a wow factor. Therefore, the approval process is taking a little longer. But having said that, Q1 of next fiscal, we are poised to launch that project maybe in April itself. So the difference between earlier and now is earlier was the development of residential overall, and there was some amount of commercial area that we were supposed to give it off to consortium of creditors, 8 lakh square feet of area. So now vis-à-vis that, what we are looking at is to develop it as a city by itself. So that is still with the USP. Since you said [indiscernible] market. So obviously, we have to make our product better and competitive pricing. So the Prestige City now will have office, support retail school, hospital and residential, of course, temple. It's a city by itself. It's got now everything. You can walk to work. We have got shopping. You've got social infrastructure and everything. So therefore, that is going to be the USP of the project. And therefore, the change of design and planning has started. But having said that, we take the premiums already. So we have taken advantage of the discount on the premium. So there's no worry as far as paying the premium, extra premiums for that project. We've already paid it in full.

Okay. Sounds great, sir. So my second question is on -- so what I can understand that over the last few quarters, there has been an acceleration in the sales velocity, plus as you said that you have been diluting stakes and raising some funds both on the commercial side and the Blackstone deal have been consummated. So now we are entering a very heavy CapEx season over the next few quarters and next few years. So can we see more of these transactions happening? Can we see more of this happening like in BKC, where we can do a startup sale, raise some funding and maybe rely on low -- have lesser reliance on debt? Maybe do something like this in NCR? So if you can just throw some light on the strategy of building out such a INR 2,700, INR 2,800 crores of rental assets over the next few years? So if you can just throw some more light here?

Parikshit, let me pause here, and I need answer this question holistically. Let me connect with earlier question somebody has asked also. Now once we reach INR 10,000 crores of top line this year as we planned, it's not like one time we reach there and then come back, we want to sustain. Now if we want to sustain, we have launched the projects that are currently in pipeline, and we also have to add to the pipeline lands, and we have to pursue new transactions, new deals. Therefore, we sustain and grow on those numbers, residential is concerned. And office, similarly we are to grow rental income, so it has to have its own, it needs capital, we may borrow, and the rental income will support that. So therefore, that's not a challenge. What we are looking at is to help this growth, at the same time, we ensure that we will not increase the debt significantly because we expressed our desire last time [indiscernible] saying that we want to be at 0.5% of debt equity. So we intend to -- this is at start level. We have made some progress. We ideally wanted to announce it subsequently, but we intend to float a real estate fund, okay? So Prestige Estates' point of view now going forward, what does it do, all residential project, any joint development it will directly do, any land that needs to be bought, we are looking at whether this fund can buy and give it to PEPL for development. So by virtue of that, we will not need too much of capital to grow the residential portfolio. At the same time, we'll be able to get the numbers. This is the thought process, and I think we will [indiscernible] set up a real estate fund soon. And that will start land acquisitions, [indiscernible] development. So by virtue of this, we will have growth and also not increase the debt.

But then -- so basically, this AS will hold stakes across all these real estate assets. So like instead of doing a JDA, maybe the payer buys out the outright land and gets some economic interest in the project which is developed by you. So I think some structure like that. Okay. And even for commercial...

[indiscernible] the projects also, at the same time, we will not deploy capital or increase the debt.

And how big is this -- how big is the fund you're planning to raise? And has anything been finalized?

We'll have a separate interaction on this front. Yes, this is going to be a sizable fund. We are already in talks with a couple of institutional investors and also -- at Chennai.There is quite a bit of appetite. And hopefully, by end of Q1 next fiscal, we should be up and running.

Okay. So just lastly on this, you did mention about how much equity you will receive, so INR 500 crores from the Phase 2, INR 250 crores from Phase 1, which is due, and roughly INR 500 crores of inflows coming in from the Star Tech. So you did touch about that debt to be moving out will be about INR 1,300 crores to INR 1,500 crores on the Blackstone portfolio and INR 500 crores shown in the Star Tech, right? So exactly INR 1,500 crores of cash inflows and INR 2,000 crores of debt moving out. Is that correct? Or...

As I said, therefore, we'll go back to debt equity ratio of 0.3 to 0.35.

So debt reduces by INR 2,000 crores, and equity comes in about -- cash comes in about INR 1,500 crores -- sorry, INR 750 crores plus INR 500 crores, sorry, INR1,250 crores, right?

Roughly.

The next question is from line of Manish Agrawal with JM Financial.

My first question would be related to the sales, the INR 4,200 crore sales we have reported. So I understand that INR 1,800 crore is from Prestige City. If you could just break it down from the other projects, how does this INR 4,200 crore sort of math work?

[indiscernible] See, Prestige City, I can give you a breakup. So INR 750 crores from plotted development. [indiscernible] project INR 400 crores. Eden Park is part of Prestige City, INR 490 crores. And Avalon Park is from Prestige City, again, around INR 960 crores. This is a broad breakup. And in addition, a project in Hyderabad that we launched, Beverly Hills is around INR 490 crores. Then we have good sales coming from Waterford, Bangalore, which is around INR 300 crores of sales. And Finsbury Park did around INR 160 crores of sales. Golfshire did INR 90 crores of sales. And Jasdan Classic around INR 70 crores of sales. So this has been the broad breakup.

So all this INR 4,200 crores is from residential projects, is there any one-off sales, which we have also done?

So one sale has happened with respect to office, which is around INR 500 crores.

And this should be pertaining to which project?

BKC.

101.

101.

Prestige 101.

Prestige BKC 101.

And what would be the broad pricing over there? Or how much area have we sold?

Total sales value will -- look, we sold it to a marquee financial institution, for financial institutions.

Okay. Okay. Secondly, in terms of Blackstone transaction, which assets exactly have moved out now?

Which asset has moved out? Actually, technically, nothing has moved completely out. It's only they're coming in as a partner. So they come as [ various ] partners into Prestige Lakeshore Drive, which is Outer Ring Road property, which is in a separate entity we call it Prestige [ Sterling ], earlier known as Prestige Beta Projects. They're also coming to Prestige Tech Park IV, which is known as [indiscernible] 50% holding. They're coming to Prestige Cyber Green, which is a Kochi project. And they're coming to significantly -- so all these 3 above that I mentioned, they're coming to 50% holding. And the other one is the Prestige Vijaya Forum in Chennai. They buy in 85% stake like they have done in all other malls.

Blackstone is effectively buying stakes across these properties?

Yes.

Okay. Understood, understood.

It's not [indiscernible] sale. So they're coming into the [indiscernible] as an equity partner.

Okay. Understood. And lastly, on the transaction with DB Realty, The promoter has invested in the equity shares over there. So what is the game plan going forward? Would you plan to merge the holdings because what is happening is there is a conflict of interest. We are partnering with DB Realty, and the promoter has interest in the DB Realty shares while Prestige is a partner to the project. So how would you think about the situation?

No. See, the thing is we gave a serious thought to it. And some of you when we were entering into transactions for the property development with the DB in initial itself, so you had some concerns skeptical about whether these projects will see the light of the day because they've been stuck for some time. All these issues were flagged up to us. Fortunately, I mean our partners performed, and we also did what we have to do. So therefore, if you see BKC 1, BKC 2, now sites are completely cleaned up, whatever slums have been there, they've been cleared. Approvals have been obtained. Same is the case with Liberty Towers. There's been progress on the ground. Having said that, there are a few more deliverables from the landowners, and the partnership size and scale has become big. So we thought to somehow -- we should look at having a little bit of, what do you say, say in the operations of the entity and know exactly what is being done at DB so that it helps us. So I mean if we had gone ahead and done something like this on the ListCo, I know you were already having taken a position to do the project you are little concerned. So we didn't want to again venture into picking up a stake with the ListCo money, the investors' money. Therefore, we took this risk from the family office and said, okay, let's do that from the family office and have some meaningful stake. So therefore, we can navigate the DB Realty well [indiscernible] obligations with respect to the transaction that they have -- have already been committed with us so that the ListCo gains, and we also know exactly what is happening within the organization, number one. Number two, we were just now a quarter away from launching a project, what we have taken from them. DIAL project is progressing well, and this office projects also will see the progress now going forward. And given the fact that they do have a good premium [ land bank ], and as you see, after this cycle of projects get developed, we make a significant progress with respect to these projects so that they can develop some more projects of theirs. So that's a strategic alignment that we wanted to have.

Understood. And Jeejamata Nagar remains [indiscernible] as of now. Any status update over there?

Progressing well.

[indiscernible] has come and cleaning up has started, and we have set ourselves a very ambitious target of completing it as soon as possible, maybe by FY '23. So therefore, that will be good for launch year after next, and that's a large project.

The next question is from the line of Sameer Baisiwala with Morgan Stanley.

Venkat, just to be very clear, your net debt as on December end was INR 4,100 crores. What would this number be by March 2022?

One moment. March 2022. I think it should be some INR 3,000 crores. No, no, no. Should be around INR 3,500 crores, that number, considering the fact that there may be some drawdowns also with respect to the CapEx project during the quarter.

So that means INR 4,100 crores going to INR 3,500 crores, so INR 600 crores...

So as such with the transaction that we are doing, it can go down further to INR 3,000 crores. I'm factoring in -- I'm taking into consideration the fact that we may draw down with respect to retail, hotel and office projects, some money further towards the CapEx. Therefore, I said the number of INR 3,500 crores.

Okay. Because the math, Venkat, doesn't seem to total up because keeping in mind BX and then the private equity static, it looks like the number should have been INR 2,000 crores, INR 2,300 crores, INR 1,000 crore deconsolidation and INR 1,200 crores of cash inflows. So it should be more like INR 1,800 crores.

Yes. Hold on, Sameer. 1 minute, 1 minute, 1 minute. INR 1,250 crores of cash is coming in. That will take the debt down from INR 4,000 crore to INR 3,000 crores. And we may have a drawdown of, say, INR 500 odd crores. That makes it INR 3,500 crores. Just give me a moment. Let me check with Amit the accounting impact that we have. Okay. So another -- the consolidation effect of this will be INR 625 crores will further go down. So consolidation effect is not there in the static because it's held by [ RMJ ] and Prestige. The debt was not -- and they were not coming for consolidation. Therefore, that will not get reduced. So INR 3,500 crores, whatever I said, minus INR 625 crores. So that will take us to INR 2,800 crore, INR 2,875 crore number. Should I repeat once again, Sameer?

No, no, this is -- okay, please, for everyone's benefit, please go ahead.

E For everyone's benefit. So we're at INR 4,200 between Blackstone transaction and CPPIB transaction, INR 1,250 crores of cash will come in. So we go to INR 3,000 crores. And we may draw down across various projects other INR 500 crores of money. So therefore INR 3,500 crore. The impact of consolidation of Blackstone transaction in net debt coming down is INR 625 crores. So therefore, we go to INR 2,874 crores. And our net worth. The impact on net worth would be current net worth because the transaction will go up by around INR 1,500 crores. Yes, that's the impact on the net worth.

Okay. So that goes to INR 9,000 crores, if I'm not wrong. So that takes you to roughly 30% or so net gearing, yes?

That's what I mentioned.

Okay.

[ INR 7,300 crores to INR 7,350 crores ] that range where we will end up to by March '22.

Fair enough, Venkat. The only problem in this whole math is that in the September 2Q con call, you had said that by March, your net gearing will move down to 18% to 20%, which now is almost double at 35%. So within a quarter, you are...

No, no, I agree with you, Sameer. You also have to look at this in line with the kind of sales we are recording and registering. When we saw in Q3, Q3 is the time where we had deployed maximum amount of capital. As I mentioned, almost around INR 1,355 crores towards all this. When we started looking -- getting this kind of response to launches and the sales, now we need to deploy capital to sustain those numbers. Therefore, we need to get land. So considerable amount of deployment has happened. If INR 1,355 crores of deployment has not happened, then we may not be able to sustain the numbers that we are getting just now. But [indiscernible] should have been lower. So therefore, I see what you are saying. And while answering the earlier question, I said, we need to address this, and we are looking at [ AF ] as an option to constantly source raw material for us with respect to residential development. That's the reason why I specifically mentioned that.

So can you give us a break up of this INR 1,355 crores, INR 1,355 crores that you spent in land and premium?

So we have -- broadly, I'll tell you where all it has gone. Is that okay? You want a full breakup, then we will share it with you separately. I'll tell you whichever projects it has gone. It's gone towards buying the plotted development land in Hyderabad, plotted development land that we just launched today this morning in Bangalore. It has gone towards the Prestige Park Drive. I'll give the names, Prestige Marigold is the one which we just launched this morning. A portion of money has gone to launch Phase 2 of Prestige Park Drive. Money has gone towards Jeejamata Nagar, a portion of money. And premium payments at BKC and Prestige City at Mulund and Daffodils, and there's been Classic as well.

Venkat, what is -- how much did you pay for Mumbai premium out of this INR 1,355 crores?

On all [ 4 ] projects?

INR 1,000 crores.

Yes. What we said -- Irfan said, broadly INR 1,000 crores.

Okay. That's fine, Venkat. I will -- I have a couple of more questions on this cash flow, but I'll take it separately.

Yes, even you can ask me in the call later, or I'm happy to share whatever information that you need post the call.

Okay. One final on Mumbai project, if I may. And that is for the Mahalaxmi project at Liberty Tower. What's the status of land over there? I thought that there were 4 or 5 different land parcels and there was some work to be done? So when do you think you'll get a clear land and you will start the construction work over there?

No, no, we've got fully cleared land, fully approved land as well as we have got, what's that called, the transfer from leasehold to freehold, the environment character's in place. Everything is in place. We've already started the construction of a building for rehab. There's one building in between where the existing tenants have to be rehabilitated in the building that we are building. But we have started work on all fronts now. The only change, again, which we are making now is that we have been talking to those existing tenants, whether they can move out in the interim in sort of wasting time for that center podium block to come up later, we thought that we'll save a lot of time if the podium block comes in along with this construction of 2 towers. So a lot of discussion going on. And hopefully, I think there is a lot of consensus on this. And all 3 towers, the podium block included, will all come up together, which will reduce cycle time by at least 1 year to 15 months. So that's the positive. Otherwise, all land parcels are fully secured, fully with us in freehold mode with all approvals.

Yes, that's fair...

There's not any question marks over there.

Yes, sir, that's exactly what I was looking for. So for the 3 towers, you say all 3 will come up together? And of this salable is -- your share is like 1 or 2? And the rehab portion is for the other 2? I mean how do you split these 3 towers?

Yes. See, 1 is -- there are 2 other tall towers, office towers. Connecting tower is the podium block, where you have the car park as well as retail. And then there's 1 more. There's a Tower A. Tower B is the podium. Tower C is again the tall tower. Behind that Tower C, which is Tower D, which is the rehab tower, and that constitutes the entire thing. Then we have a Tower E, which will be only for services. So this constitutes the entire development. And right now, Tower B construction is on. Tower A and C is also, the work can come in almost immediately. The piling work can start. The contractor's on board. So Tower B, that was a connecting tower between A and C, which was the podium, which we thought we will finish the Tower D and then move these guys. Now what has happened is we have started thinking slightly differently. And if we move the middle tower guys who are existing there, maybe everything will work out faster, but it's moved in a positive direction, and hopefully, everything will come up together.

[Operator Instructions] The next question is from Kunal Lakhan with CLSA.

Just on this investment with DB Realty. Firstly, I wanted to understand, was there any need for the -- have you taken -- has the promoter group taken any Board approval regarding this investment into DB Realty?

Yes, we have.

Okay. Sure. So going ahead, I think because these 5 entities will become like practically related parties. So I think any further investments or any further change in stakes over here would require Board approval, right?

Definitely, go through the compliance, audit committee, Board if needed be, by shareholders. See, Kunal, the whole thing has been done to protect the interest of the organization and the projects that we have entered into. This will help us to look into the operations of DB because our partnership is very large, spread over 6 projects. And ensure that deliverables of DB are done, the funds that DB gets are utilized towards fulfilling the obligations. So the net impact is definitely going to be at the project level. JD will become stronger, and the benefits will accrue to the ListCo. And the risk, whatever the promoter family takes to put in money into the entity to have that control in terms of operations. So all the compliances will definitely be taken whatever is required, including taking shareholders' permission, we are going to do the new projects, if that is applicable.

Sure. So but we don't have any Board representation yet on DB Realty?

Of course, we intend to have.

We don't want though.

Okay. Fair enough. Secondly, on our debt, again, right, if you look at our debt, has gone up by about INR 2,800 crores to INR 2,900 crores in the last 3 quarters, and we have been talking about consistent land acquisitions quarter-after-quarter. Now I just wanted to understand on our asset model, earlier, we used to be a lot of JDAs and JDs, but that seems to be changing now. Are we like going forward, going to turn more asset heavy versus our historical model of being asset light, at least on the residential side?

Kunal, we are happy with the sales that we have done. Right, right. Sir, you want us to be there, fall from there, or continue to grow on that? You want us to continue to grow on that number. And it's a significant jump. It's like -- that's why specifically we read out from the previous year, previous quarter, it's a little over 100% jump. Therefore, to feed that kind of now land bank, material or upcoming projects, we need to have that capital deployment, okay? Otherwise, we can keep the debt where it is and yet not grow. That's not why we are here, no. We want us to grow as an organization. Therefore, this is capital -- so once we consistently start achieving the [ central ] results of top line, you would also know that the debt compared to the top line is very small, okay, number one. Number two is look at the scenario right now. Assuming that we do joint development, joint developments in the inflation economy where the steel projects are going up, material projects are going up, labor projects are going up. What will happen? It will have a bottom line impact. At the same time, if we were to have a land that cascading effect is not there, no? So therefore, wherever land owners are saying we'll do JDs, we are going ahead. Otherwise, whenever we have a leeway, we are looking at buying land. And this is going to be for a quarter or more, once as I told you that [ AF ] comes into play. And the [ AF ] will buy the land and give it for the development. So therefore, listed company will continue to grow and have this kind of robust sales, yet not have so much of debt burden. Just a quarter or 2 till we stabilize.

Sure, Venkat.

Kunal, could you hear? I didn't get the response. Hello?

Yes, I heard it, I heard it, Venkat.

Okay. Thanks. Thank you.

The last question is from the line of Abhinav Sinha with Jefferies.

In the interest of time, just one question. What is your investment in Mumbai now? Total book value?

All put together would be around INR 2,000 crores, Abhinav.

Okay. And this includes the recent FSI payments? Or this is excluding that?

One minute, Abhinav. INR 2,500 crore, including the payments of premium.

INR 2,500 crore. Okay. Okay. Venkat, I mean, a suggestion, the numbers in the company have become quite big now. And congrats for that. But we can start having more disclosures on the presentation itself, I mean it will be very helpful.

Yes, we'll add. No, what we intend to do now, Abhinav, I'll [indiscernible] separately also, if you wanted a copy, all of you. Maybe we'll try and give geography-wise also now breakdown because Mumbai is big. We started with Mumbai slide, which you see. Now let's start giving each of the Hyderabad [indiscernible] Chennai, and all of that, and also breakdown in terms of the segments in which we are selling residential-wise. We'll make it a little more robust so that you understand in greater detail the operations of the company. We'll do that.

The next question is from the line of Amit Khetan with Laburnum Capital.

Can you share what is the launch status of our other Mumbai projects? I think Mulund you mentioned will be launched in April. What about [indiscernible] and also the Greater Noida project of Prestige [indiscernible]?

So as far as the Mumbai projects are concerned, Jasdan is launched. Prestige City at Mulund; Prestige Daffodils, Pali Hill; Prestige Ocean Towers, Marine Lines, all fully should get launched in April. As far as Noida project is concerned, we are waiting for the last leg of approval, and I think there will be election code that is running right now. It will be post elections once we get the approval. But also we'll get launched by Q1 of next fiscal. So we are also pursuing some other properties in [ KR ] region. So hopefully, we should be able to close those properties also, transactions also during the...

Ladies and gentlemen, the line for the management has been disconnected. Please stay connected. We will connect again. [Technical Difficulty] Welcome back to the call, sir. Mr. Amit Khetan, you can continue with the question.

[indiscernible] as far as the Noida project is concerned, Prestige Bougainvillea Gardens, we are waiting for the last leg of approval. There is election code right now running there. So post elections, once we get the approval, we'll target to launch. The [indiscernible] is ready, sales office is ready. There are a lot of inquiries that are coming in because they can see some development coming up from our side. But we don't want to do anything till we have approvals in our hands. So therefore, that will also be Q1 launch.

Understood. And lastly, just wanted to clarify one thing. You mentioned an exit rental run rate of INR 350 crores to INR 400 crores. That was for FY '22 or '23?

'22.

Ladies and gentlemen, this concludes today's question-and-answer session. I would now like to hand the conference over to the management for closing comments.

Thanks, everyone. Thanks for the active participation. I hope we've been able to give you clarity on what we are up to. But having said that, yes, the whole idea is to make the company stronger, see that the returns to the stakeholders keep coming nicer and bigger. And I think the team is working towards this day in and day out. And I'm sure as we go along, there will be a lot more good things happening. And at the end of the day, the worth of the company keeps increasing. That's the whole idea. And I do hope that you appreciate what we are up to.

Thanks, everyone, for being on the call, and thank you for the inputs. We'll continue to grow, and we'll continue to deliver on the promises that we have made to customers and the stakeholders. It's been very exciting last year for us. Looking forward to the next fiscal, it's going to be defining for us because of the big launches that we have in the pipeline in the new geographies. We look forward to your continued support. Feel free to write to us if you need any further information. And we'll also start updating you with more and more information given the fact that now the scale of operations has become big. Thank you.

Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.