BSE: 500256
NSE: LOKHSG
CMP:Rs. 154.30
Target: 300 in 12-15 months
Company Website:http://www.lokhousing.com
Company Facts
Incorporation
Incepted in 1986, Lok Housing and Constructions Limited is the flagship company of the Mumbai based Lok Group of Companies and firms founded in 1982.
Experience
Backed by over two decades of experience in designing skylines, explicit from its exemplarary portfolio of projects across both the residential and commercial segment, Lok Housing's name has today become synonymous with quality, versatility, innovation and pioneering in the real estate development in Mumbai. The company is also reputed for developing innovative range of properties across all budget options ranging from middle and higher middle projects on one hand to ultra modern and premium projects on the other, which helps it amply address diverse customer aspirations and lifestyles.
Corporate structure
In 1990, Lok Housing took the road less travelled in a fragmented, individual driven realty sector by imbibing professional management standards, ushering in high levels of transparency and establishing a corporate structure guided by an eminent board of directors on its group of companies.News Items: Economic Times Source: http://economictimes.indiatimes
City's salt pan land gets freed up for real estate
MUMBAI: Huge tracts of privately-owned salt pan land would be made available for redevelopment in Mumbai if last week's Bombay High Court order is an indication.
The court has set aside three legal suits filed by the Union government against Lok Housing and Suresh J Thanawala over 175 acres of salt pan land in Turbhe, Navi Mumbai, which was sold by Mr Thanawala to Lok Housing. Mr Thanawala, the original land owner of the salt pan, sold the land to Lok Housing in 1994.
The Union government had earlier opposed the use of salt pan land for real estate development. The court has now cleared the way for redevelopment and asked the Union government not to create any legal obstructions for the developer.
It is estimated that Mumbai has over 2,000 acres of privately-owned salt pans that are owned by developers and industry houses like the Godrej group, the Ajmera group and Lok Housing.
"Since the court has allowed Lok Housing to carry out the redevelopment of land, they are now settling various other issues with the commerce ministry," said industry sources. However, legal experts feel that redevelopment of salt pan land depends upon the kind of land and its location. "If it is a leased land from the government, the private developer can't do anything and it all depends upon the Centre. In the case of privately-owned land, the developer can redevelop it if the court permits.
But in Mumbai, privately-owned salt pan land is negligible," Divyakant Mehta, advocate, Divyakan Mehta and Associates, said.
With land prices in Mumbai becoming dearer by the day, more and more heads are turning to salt pans, which are being viewed by developers and builders as the answer to the city's housing problems. Mumbai and its suburbs have over 6,000 acres of salt land — both privately-owned and lease-held — under litigation. Various court cases are pending with the high court and the Supreme Court on the issue. If the Thanawala case sets a precedent, huge tracks of privately-owned land will be available for redevelopment, industry officials said.
Senior officials with Knight Frank India said there are 3-4 kinds of salt pan agreements in Mumbai, between the developers and the state as well as the Union government.
"Redevelopment of the land would depend on the kind of agreement they have entered into with the state or the Union government," they said.
Last month, the Prime Minister had cleared the redevelopment of the government-owned salt pans in Mumbai to rehabilitate slum dwellers. It is likely that more land will come up for redevelopment, offering a big development opportunity for real estate developers in the city.
However, it is not yet clear how the land will be allocated or who will develop it. "The methodology is not stated. There has to be some participation from private developers to help in construction," said an official with Hiranandani Constructions.
While the development of unused salt pan land is being viewed as a possible answer to the city's staggering housing problem, the project will require massive funding. Real estate dealers feel that redevelopment of government-owned salt pans could get delayed for decades unless the private sector is allowed to participate.
Financials
http://www.moneycontrol.com
INTRODUCTION
The construction activity as per the International Standard Industrial Classification consists of contract construction by general builders, civil engineering contractors and special trade contractors. The sector also includes own account construction carried out by independent units of enterprises or other organisations, though it is not a part of the construction industry proper. The importance of the industry lies in its strong linkages with the economy. Its multiplier effect on the economy is one of the highest. The multiplier effect is 1.85 times the assets being created.
Real growth in construction (Rs bn)
1999 | 2000( projected) | ||
Volume | Growth | Volume | Growth |
2100 | 7.7% | 2180 | 3.8% |
This sector, while contributes about 5% to the GNP, has been growing at 9.1% at constant price (at 1993-94 prices) where as at current price it has declined to 12.6% from last years 17.6. It clearly indicates that the prices have not moved much in this sector.
The expenditure on construction for the period 1981-1991, was Rs 3142.32 bn and it is expected to increase to Rs 53242.26 bn for the period 2001-11 i.e. an increase of about 1600%.
Cumulative Expenditure in Construction Sector (Rs bn)
Year | Total Exp | Res. Bldgs. | Non-Res. Bldgs. | Other forms of Const. |
81-91 | 3142.3 | 800.4 | 692.0 | 1694.9 |
91-01 | 13146.2 | 3377.2 | 3328.2 | 6440.9 |
01-06 | 17683.1 | 4547.9 | 4576.2 | 8559.0 |
06-11 | 35559.2 | 9150.3 | 9264.5 | 17144.4 |
01-11 | 53242.3 | 13698.2 | 13840.7 | 25703.4 |
The industry can be classified into three broad segments: Civil (municipal roads, sewerage and water supply projects), Infrastructure (highways, bridges, dams, ports etc.) and Housing / Industrial segment (residential and non-residential construction).
The industry is highly fragmented with over 300,000 contractors of which only about 100 are large/medium-sized companies. Over 60% of the contracting firms are into housing, while 20% are into industrial, with the remaining 20% in both the segments. Large companies usually have a major presence in non-housing sector, whereas small players venture into real estate projects. Proprietary concerns focus on small/ individual housing projects and civil work for small industrial units. However, given the natural cost advantage enjoyed by the small firms, many large companies sub-contract a part of the big projects.
Major listed players
Housing | Industrial / Civil / Infrastructure |
Ansal Properties, Lok Housing, Premier Const., Alsa Const. | Astron Engg., Gammon India, UB Engineering, Continental Const., Jaiprakash Ind., L & T, Unitech, Hindustan Const., Kvaerner Cementation |
The housing sector is on an upward spiral this financial year. The disbursals by home finance institutions (HFIs) show that in 00-01, the 29 approved HFIs are expected to disburse Rs. 125 bn against Rs 95 bn in 99-00. In the first half, the number of dwelling units financed by HFIs has grown by a massive 50% and disbursal rose 30%. From Apr-Sept 00 HFIs financed 112,615 units against 75,516 units a year ago. The housing finance segment is growing at a compounded annual rate of 30%.
Civil Construction
This includes construction of roads, water supply and sewerage projects. Civil projects have historically been government sponsored and large projects are normally split up into under Rs 20 mn contracts. Consequently, the unorganised sector share is around 85%. The financing of civil projects are done through internally generated resources (both tax and non-tax revenue) of the municipalities, and transfers from Central and State governments. The Government of India also allocates resources to the State Governments through various centrally sponsored schemes, provides finances through national financial institutions and supports various external assistance programmes for urban development in the country as a whole. Since 97-98, there has been budget sops for various infrastructure projects and a few municipal corporations have also undertaken steps to realise fund from the market.
The total housing stock in India in 1991 was 153.2 million units, of which 40.7 mn units were in urban areas and 112.5 mn units are in rural areas. Housing shortage in India stands at 7.2 mn in urban areas and 13.2 mn in rural areas in FY99. Housing investment in India forms a relatively small proportion of GDP. This is partly due to credit allocation policies that restrict exposure of regulated institutions to housing finance. The budget for FY99-00 has made an attempt to increase housing stock through new policy initiatives and incentives for private investment. The budget for 2000-01 has extended the benefits available to the housing sector for another two more years, i.e. for houses or projects that are completed by March 31, 2003. A 20% rebate of tax for repayment of housing loans of up to Rs. 20,000 would be allowed. The budget has set a goal of providing 2.5 mn dwelling units in rural areas. Several schemes for meeting the needs of different sections of society have been prepared.
An amount of Rs 920 million has been provided by the budget for construction houses under the credit-cum-subsidy scheme, for families with annual income below Rs 32,000. The National Housing Bank will provide refinance to banks and housing finance companies for construction of houses under Golden Jubilee Rural Housing Finance Scheme.
Housing Stock (mn units)
Urban | CAGR % | Rural | CAGR % | |
1961 | 14.1 | - | 65.2 | - |
1971 | 18.5 | 2.8 | 74.5 | 1.3 |
1981 | 28.0 | 4.2 | 88.7 | 1.8 |
1991 | 39.3 | 3.4 | 108.7 | 2.0 |
2001 (e) | 59.4 | 4.2 | 119.7 | 1.0 |
The oversupply in the urban India has led to a fall in the price of the housing stock with little sign of improvement. Real estate prices have bottomed out but however, growth is expected to accelerate due to the freeing of the allocation norms for LIC and GIC. Government has also repealed the Urban Land Ceiling Act which will ensure supply of land in urban areas and has also decided to allow private participation, including FDI, in the housing sector to meet the growing demand for housing in metros and other urban areas.
The industrial construction segment is a function of industrial growth, capital utilisation and investment. Major contribution is expected to come from the power and petroleum sectors where several units are coming up. Apart from this, the government has also given permission to develop area bordering road projects, which could see several commercial and service construction projects coming up. In the remaining areas in the manufacturing sector, growth is not expected to be high on account of postponement of investment decisions due to uncertainty on the political front and slowdown in demand.
Select Ongoing Power Projects
Projects | State | Capacity (MW) |
Dabhol Power Company (Gas/ naphtha based) | Maharashtra | 2450 |
Daewoo Power (Coal based) | Madhya Pradesh | 1000 |
Dakshin Bharat Energy (LNG based) | Tamilnadu | 1850 |
Duncans North Hydro Power Co (Hydel Power) | Shrinagar | 330 |
Hinduja National Power (Coal based) | Andhra Pradesh | 1040 |
Rosa Power Supply Company (Coal based) | Uttar Pradesh | 567 |
Tannirbhavi Power Co (Naphtha based) | Karnataka | 200 |
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