Page 52 - Arvind 2024

Company overview
Arvind SmartSpaces Ltd
(ASL), established in 2008 in Ahmedabad as a fully owned subsidiary of Arvind Limited, serves as the real estate division
of the Lalbhai Group, a USD 1.7
Bn conglomerate. ASL focuses
on developing residential spaces such as villas, apartments, and plots aimed at middle and high- income consumers. Its portfolio includes integrated townships featuring executive golf courses, villas, apartments, along with retail, commercial, and recreational facilities. Additionally, ASL selectively engages in commercial and industrial projects. As of
the fiscal year FY23-24, ASL successfully completed projects totalling 4.9 Mn square feet, with ongoing projects amounting to 26.9 Mn square feet and future projects totalling approximately 43.5 Mn square feet.
Project overview
Arvind SmartSpaces Ltd is focused on the development of real
estate projects in the residential, commercial and industrial segments. As of March 31, 2024, the Company’s ongoing and pipeline projects are categorised into mid-segment projects (81%), premium/luxury projects (14%) and affordable projects (5%).
Company’s strengths
Strong promoter relationships: Arvind SmartSpaces Ltd (ASL) benefits from its strong promoter links as it is integrated within the Lalbhai Group, which includes leading entities like Arvind Limited and Arvind Fashions Limited under the same brand umbrella. The parent company’s ownership, ~50.4% of ASL, underscores its trust and investment in ASL’s future. The presence of shared Directors across the companies’ Boards further cements this relationship, offering robust support to ASL.
Streamlined operations with low fixed costs: ASL has strategically kept its fixed costs minimal by
centralising essential operations as it delegated non-essential tasks and construction work to external parties. This approach is supported by a lean in-house team of approximately 400 employees and the execution of 68% of its projects through joint development efforts.
Credit rating enhancement:
ASL’s creditworthiness has seen a positive shift, with Indian Ratings and Research upgrading its Long- Term Issuer Rating to ‘IND A+/ Stable’ and assigning a positive outlook. This upgrade reflects
the Company’s strong financial collections, which have favourably impacted its pre-sales to net
debt and net debt to working capital ratios. Thanks to robust internal cash flows and a reduction in debt, ASL is positioned to manage debts, paving the way for substantial growth.
Strong sales and steady cashflow
In the fiscal year 2024, Arvind SmartSpaces Limited (ASL) recorded a significant rise in its pre-sales, which rose to Rs. 1,107 Cr, supported by the sales of ongoing projects and the launch of new projects or additional phases. This enabled a net operating cash flow of Rs. 458 Cr.
Diversified geographic presence across varied ticket size
ASL’s projects are moderately diversified in terms of ticket size and geographic presence. Of its current projects, 14% are luxury, 81% are mid-segment and 5%
are for affordable housing. The Company has its key focus set
on residential projects with a strong presence in Ahmedabad and Bangalore. During the year, ASL entered Surat with a ~Rs. 1,100 Cr horizontal multi asset township project. This will be the third city in Gujarat where ASL operates, apart from Ahmedabad and Gandhinagar. ASL is exploring opportunities for diversification
in the Pune and Mumbai Metropolitan Region, a desire to
expand beyond Ahmedabad and Bangalore.
Horizontal development
The pandemic and the shift towards hybrid work models
have significantly altered people’s preferences in housing and real estate, with a growing demand for larger, independent homes that emphasise health and security. This period also witnessed an increased desire to own land, offering homebuyers more control and flexibility, especially in the plotting sector where built-to- suit options have become more prevalent.
According CBRE, low
density housing or horizontal developments namely Villas and Plotted development remain popular in premium category. Encouraged by the larger trend
of ‘flexible-work-environments’, buyers are increasingly looking
for spacious private living spaces, thereby driving the demand for plotted developments and villas. Key features of such developments include a deep focus on design, personal open areas, modern amenities, uncrowded recreational facilities, and adequate green landscapes - all confirming to the buyers’ emerging need to pursue a superior lifestyle.
Luxury real estate has long
served as a coveted asset class
for discerning homebuyers reflecting their aspirations and evolving lifestyle preferences. Early primarily characterised by standalone bungalows in marquee locations, luxury real estate is now represented by branded horizontal developments (premium plots
and villas), penthouses and sky villas within large townships.
The product is designed as
a holistic amalgamation of premium customisations,
robust infrastructure integrated with smart technology which seamlessly compliment the homebuyers multifaceted
living. Contemporary horizontal development effectively addresses the desire for smart, secure,
50 | Arvind SmartSpaces Limited