Ajmera Realty & Infra India Limited (NSE:AJMERA) Q1 FY23 Earnings Concall dated Aug. 09, 2022
Corporate Participants:
Nitin Bavisi — Chief Financial Officer
Dhaval Ajmera — Director
Analysts:
Rahul Talwar — LKP Securities — Analyst
Jeevan Patwa — Sahasrar Capital — Analyst
Ritesh Kamdar — Private Investor — Analyst
Raj Shah — RS Investments — Analyst
Vipin Taneja — Private Investor — Analyst
Mihir Desai — Desai Investments — Analyst
Pankaj Tanna — Varun Investments — Analyst
Anushka Atri — Private Investor — Analyst
Presentation:
Operator
Ladies and gentlemen, good afternoon and welcome to Ajmera Realty & Infra India Limited Q1 FY 2023 Earnings Conference Call. We have with us today, Mr. Dhaval Ajmera, Director of the company, and Mr. Nitin Bavisi, Chief Financial Officer. [Operator Instructions]
I now hand the conference over to Mr. Nitin Bavisi, Chief Financial Officer, Ajmera Realty & Infra India Limited. Thank you and over to you, sir.
Nitin Bavisi — Chief Financial Officer
Thank you, gentlemen. Good afternoon, everyone. Thank you for joining us for Ajmera Realty & Infra India Limited First Quarter financial year FY ’23 conference call. I hope all of you, your families, and your loved ones are safe and in good health.
We will begin the call with opening remarks on business and financial highlights from the management followed by Q&A session. Before we begin, I would like to state that some of the statements in today’s discussion may be forward-looking in nature, reflecting our future outlook, as they involve certain risks and uncertainties the company may face. The investor presentation and the press release based on the financial results adopted by the board, have been uploaded on the Stock Exchange website and can also be downloaded from the website of the company.
I would like to now invite our Director, Mr. Dhaval Ajmera to begin the proceedings of this call. Over to Mr. Ajmera, please.
Dhaval Ajmera — Director
Thank you Mr. Bavisi. Good afternoon, everyone. Hope everyone is safe and sound. On behalf of Ajmera Realty, I would like to welcome you to the earnings call for the first quarter of FY ’23. I will be discussing the highlights of this quarter, followed by financial performance highlights from our CFO, and then we look forward to taking up questions and answers and any suggestions from your end.
So, let me begin by giving you — about the real estate outlook, which we have seen over the last quarter. Despite — we all are experiencing, that last on quarter, has been tremendous geopolitical scenarios happening and a lot of changes in terms of the U.S. economic slowdown, Europe having some issues, Russia and Ukraine conflict. But having said that, what we observed and what we saw was that real estate in India has seen a resilient performance, and it has always been — upped the ante, even while all these uncertainties were going on.
The economies of the world are facing tough challenges like supply chain disruption, logistic bottlenecks, and upward pressure on commodity prices. The structural reforms undertaken by the government, strong fundamentals, and dynamic policy formulation have helped the Indian economy maintain consistent improvement in macroeconomic performances as compared to other economies.
The synergy of first-time homebuyers, pent-up demand, preferences of larger homes and second homes, and easing of mobility restrictions, and improved appetite for spending have resulted in improved sentiments towards the real estate. Although over the last one quarter, we saw that the interest rates have increased in terms of home loans, but still, there was a bit of resistance here and there, but overall, we still saw a good demand coming up. And with all this work-from-home culture slowly coming down, we are seeing great demand in commercial real estate also, which is coming back on track and we have been hearing news about the great demand and buy-ups happening in commercial offices, in and around — in Mumbai and other places, which is looking at owned offices, or flexible working spaces. So, these both are really looking and doing well.
Coming to Ajmera Realty, I would like to highlight some important developments that happened since the beginning of FY ’23. Firstly, and foremost, our marquee project Ajmera Manhattan in Wadala, in the suburbs of Mumbai, we had a very successful launch, which was our — is our main project and we are very proud that today, Ajmera Manhattan brings a complete; when we started off this name, we made up a theme of New York-based lifestyle, New York-based culture which we wanted to bring to the city of Mumbai, and that we successfully have done this, and we have seen great response coming for those — for that kind of a project. Manhattan is a 500,000 square feet of carpet area approximately project, which is of two towers, with an overall sales value of about INR1,400 crores to INR1,500 crores.
And with this we have seen that, the work also has started in a very robust manner, where we have already completed the excavation of one of the towers, and both the towers, and foundation work of one of the towers is almost done, as we speak today. And it is also significant to know, that 25% of the inventory is already sold as of June 2022.
Our mid-stage project Greenfinity which is self-funded, and Sikova our boutique commercial office is also 60% sold, off its inventory. Both these projects are set to complete in FY ’23. Our residential development Codename Juhu in Mumbai, has been recently demolished and I am glad to announce that as we speak today, we have received the commencement certificate of the project, and we have already applied for RERA. So very soon, we should be announcing sales, but we have already started construction because we have got the permissions.
Finally, coming to the much-awaited acquisitions of Codename Ghatkopar, where the land is now completely acquired from Tata Communications through our 100% subsidiary, and the plan is to construct a nice residential tower, potential of about 95,000 square feet, which will give us — generate a revenue of about INR250 crores in the next three years.
So having said that, we have maintained a robust launch momentum from Ajmera Manhattan, which we launched in April, and looking at our acquisition plans, which is successfully acquired and now in the process of launching to sell Ghatkopar and Juhu, which totals to about — the new projects put together is about INR400 crores of topline. So this shows, we are moving in the right track and as we have discussed earlier, we are on our track to launch our projects which we have planned over the next two years, and we should see — in this, we should see an addition from whatever we are launching, we have another 11.8 million square feet of land bank or area — FSI available from our existing land bank.
We are also aggressively looking at inorganic growth opportunities within our company, through our low capex acquisitions like JV/JDA/DA models, where a lot of active discussions are happening and we should be hopeful to close a few soon.
This brings me to end our business highlights, where I would like to thank all our stakeholders at Ajmera Realty to help us achieve our 5x growth plan, and we are moving towards that and with our all recent launches and the new upcoming ones, we are very sure that we should be achieving our 5x growth plan very soon.
I would request Nitinbhai to please take you through the financial performance of FY ’23 and this quarter to everyone. Thank you.
Nitin Bavisi — Chief Financial Officer
Thank you Mr. Ajmera. I will take you through the operational and financial performance for the quarter first, FY ’23. Ajmera Realty has opened the financial year with a very high performance and expects to further accelerate, as we move on.
We achieved sales value of INR400 crores, recording an exponential growth of 261% on a YOY basis, and about 2.3x on a QOQ basis, mainly on account of Manhattan presales which is about INR354 crores in the first quarter of launch. It is significant to note that it is comparable to the entire annual sales of that of financial year ’22, which is about INR431 crores.
We witnessed impressive growth in sales volume and collection too. Sales volume is about 157,000 square feet, which is 155% on a YOY basis and 130% on a QOQ basis. We recorded collections at about INR210 crores, which is an impressive growth of 93% on YOY and 126% on a QOQ basis. The realization has improved to INR25,411 per carpet area, which showcases an upward trend, due to the high velocity of Mumbai projects.
I am pleased to share that we have achieved these growth numbers, despite headwinds from the higher input costs, upward revision of the repo rate, and other economic challenges. This strong performance was a result of successful project launches and good traction in our existing project on sales and execution side, both.
Coming to financial performance for the first quarter, our revenue stood at INR55 crores and EBITDA at INR18 crores, and EBITDA margin at 33%. PBT at INR15 crores and margin at 28%, and PAT at INR12 crores and PAT margin stood at 21%.
The revenue of INR55 crores includes the first-time revenue recognized under the POCM method for the part sales value of completion visibility on the account of the Greenfinity Project. We maintained our normalized margins at about 9.3% despite the inflationary pressures, on the PAT basis. Coming to debt, we further reduce our debt by INR25 crore in quarter one FY ’23, due to traction in sales and collections. All our advanced state projects have been deleveraged, with no outstanding project debt. The weighted average cost of debt inched up by 40 basis points to around 11.6% as of June 30, 2022, and our debt-equity ratio stood at 1.12x of net worth as of June 30, 2022, compared to 1.1x as on March 31, 2022.
We have strong visibility of around INR709 crores from our existing portfolio. From our advanced stage projects, we have balanced revenue from the sold inventory, which is about minuscule INR13 crores, and the balance unsold inventory revenue is about INR155 crores. From our mid stage projects, the balance sold and unsold inventory revenue is INR169 crores and INR372 crores respectively. Front-ended costs payments, which we made under the concessional scheme, as of December 31 for Manhattan and Juhu projects, is really helping us to further accelerate this particular revenue recognition process, as we move on.
We further estimate total potential revenue of about INR2,100 crores from our launches in the pipeline during the next two years with an estimated carpet area of 1 million square feet. Our total revenue from the existing and recently launched projects is about INR700 crores and INR1,500 crores respectively; INR1500 crores I refer to Manhattan Project, bringing the total revenue potential of about INR4,300 crores on these projects. We are confident in delivering strong performance in the coming quarters, along with a robust pipeline of quality projects in execution, and as well on the launch, which will further help us on our 5x growth, of course with inorganic initiatives as, Dhavalbhai mentioned.
On this note, I would like to conclude my remarks and now we are open for the Q&A session and as well for your suggestions. Thank you.
Questions and Answers:
Operator
Thank you very much. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Rahul Talwar from LKP Securities. Please go ahead.
Rahul Talwar — LKP Securities — Analyst
Yeah, hi sir. Sir I had a couple of questions. Am I audible?
Dhaval Ajmera — Director
Yes please.
Rahul Talwar — LKP Securities — Analyst
Great. So, my first question was on the total revenue. It has significantly declined, both as compared to the quarter as well as YOY, similarly the EBITDA as well. Is there a specific reason for this?
Nitin Bavisi — Chief Financial Officer
Let me tell you, this particular quarter has the contribution from two ongoing projects, Sikova and Greenfinity which is the advanced stage of completion and these are the two projects which we have contributed to, because as you know that, all the advanced stage projects of the Aeon, Zeon, and Treon, those got recognized significantly on the completion in the last financial year. And we have further launches, which is where the sales book has been generated, those revenue is going to be accounted as well as for the threshold limit achieved in the coming quarters.
So, Sikova and the Greenfinity projects have contributed to this top INR55 crores of the top line, and that too with a one time or the first-time recognition of about INR7 crore revenue recognized for the sale value of the Greenfinity project which is having now completion visibility, so that one is also now recognized.
Rahul Talwar — LKP Securities — Analyst
Sir, my next question would be on the expectations in terms of margin. So are there any specific expectations you have set for, let’s say FY ’23, and will they remain the same, or are expecting more improvement on the same?
Nitin Bavisi — Chief Financial Officer
Overall the inflationary pressure is going to definitely put us — or for that matter any industry player be on the margin pressure side. But however, the kind of sales which we have generated and the number and nature of projects, the composition of the price point of the projects in which we are launching in the kind of Manhattan Project say as an example, where we have sold about 25% of the inventory. So those kinds of initiatives and the project launches will definitely help us to further accelerate on the margin momentum also.
Rahul Talwar — LKP Securities — Analyst
Okay, okay sir. Okay, understood. Sir, my last question would be related to the market. So, with many bigger real estate players entering Mumbai specifically, how do you see the real estate competitive landscape and how will Ajmera differentiate itself from its peers?
Nitin Bavisi — Chief Financial Officer
So basically you know what, today real estate has become a very — with the invention of RERA coming in and we personally see, that real estate is going to become more significant to those players, which have been in this business over a longer time, who have delivered projects, and who have sustained probably a lot of recessionary cycles up and down over the last couple of decades. We as Ajmeras have been in this business over the last 53 years.
Secondly, preference also comes to players, developers who are listed. That also gives us a tick in a box to us, that we are listed today. And thirdly, with so much experience, and so many deliveries along with listing, I think this all becomes as a priority for the preferences of a buyer to invest their money, and that can be clearly seen with the kind of launches, which we did and the results which we have got; because clearly to buy, do a sales of INR300 plus crores in just two months time, is something which we see — in a particular micro market and not overall; so, that itself shows the confidence the market has in Ajmera.
Dhaval Ajmera — Director
Just to add on the operationally like the case study of Wadala where we have all the offerings to the market, kind of a mid-market project like Greenfinity at an advanced stage of completion. With the just-launched project, which is a compact luxury offering in Ajmera Manhattan, and with the ready to move in inventory kind of thing, which is available inventory left out in the Treon kind of thing. So, such kind of offerings is may be taking — it may be looking very optic to the market, but it is really a business case for us kind of a thing. So, that is how we try and see kind of the number, kind of convergence which we have seen in the sales velocity of Manhattan.
Rahul Talwar — LKP Securities — Analyst
Thank you so much for answering my question. Sir, I will get back in the queue. Thank you so much and all the best.
Operator
Thank you. Our next question is from the line of Jeevan from Sahasrar Capital. Please go ahead.
Jeevan Patwa — Sahasrar Capital — Analyst
Yes. So you are saying that Greenfinity and Sikova have actually contributed to this particular revenue. So, can we assume that these two projects are having EBITDA of 35%?
Nitin Bavisi — Chief Financial Officer
No the Greenfinity project, although it is a self-funded, however, it is an affordable product, so it will have the EBITDA or the project level margin of about 20% kind of thing, and as well as the Sikova being the boutique office space kind of thing. So, both the projects will have the margin of around 20%-80% [Phonetic].
Jeevan Patwa — Sahasrar Capital — Analyst
But this time you have given 35% EBITDA, right?
Nitin Bavisi — Chief Financial Officer
So, that is what I clarified this time, the first time revenue recognition has happened, which is about INR7 crores in the overall INR55 crores topline from the sales value on the Greenfinity project, and that has really contributed on the top line, and as well the EBITDA and the PAT line also. But our normalized PAT margin is about 10% as we have clarified, and as well in the investor presentation.
Jeevan Patwa — Sahasrar Capital — Analyst
Okay, which are other projects which we are basically — which you think will contribute to the P&L this year, FY ’23?
Nitin Bavisi — Chief Financial Officer
So, that is more of a — how the threshold is going to be achieved, but having a velocity of sales for the Manhattan, we are very hopeful because of the front-ended approval cost already paid off in the December quarter, and on the execution side also, we have spent a significant amount. So, we are hopeful that in FY ’23 we are having that threshold achieved and we should be recognizing numbers on account of the Manhattan sales.
Jeevan Patwa — Sahasrar Capital — Analyst
What is the threshold?
Nitin Bavisi — Chief Financial Officer
25%
Jeevan Patwa — Sahasrar Capital — Analyst
25%. Okay. Thanks a lot.
Operator
[Operator Instructions] The next question is on the line of Ritesh Kamdar as a shareholder. Please go ahead. Ritesh, your voice is not audible. Request you to use the handset and please proceed.
Ritesh Kamdar — Private Investor — Analyst
Hello, am I audible?
Operator
Yes, better now.
Ritesh Kamdar — Private Investor — Analyst
Can you please brief on your Bahrain and London projects, as to how they are progressing in terms of sales? And what would be the value that are expected to be realized in the near future?
Dhaval Ajmera — Director
So, as we have said earlier, Bahrain project has already been sold to someone else and we are no more developing the project. As a part of our value consideration and the floor land consideration, we are going to get the area against the money which is due to us, and we are getting about 10,000 odd square meters of area from that, which is — in today’s market terms which will be roughly about INR200 plus crores, which we should be expecting to get. The project currently over there is under RCC completion, which is like, the superstructure almost getting completed, and we should be expecting that to come very soon, now the finishing work and that is going on. So that is regarding Bahrain.
Regarding London, our projects have now been completed and they are under sales, already some projects have been sold. There is a time gap between the sale finalization and sale closure, which is where the period is currently, and we are expecting to have money coming in the tune of about INR50 crores to INR60 crores — sorry, about INR80 crores over this financial year.
Ritesh Kamdar — Private Investor — Analyst
Okay, thanks. And update on your demerger, this is pending since so long, right.?
Nitin Bavisi — Chief Financial Officer
Yeah, so last couple of dates, in which the final petition was to come on the board and was to be taken up for the final NCLT approval, matter could not come on the board because of the heavy pressure on the queue kind of a thing. So, we are also very eagerly waiting for the petition, because there is hardly anything. It is a plain vanilla demerger scheme. So, we are hopeful that NCLT blessings can come, once the hearing comes on the board.
Ritesh Kamdar — Private Investor — Analyst
Thank you.
Operator
Thank you. We have the next question from the line of Raj Shah from RS Investments. Please go ahead.
Raj Shah — RS Investments — Analyst
Thanks for the opportunity. I have some questions. So, if you can just share some details related to the Pantnagar land acquisition? And when we can see the projects or any work to get commenced?
Dhaval Ajmera — Director
So Pantnagar, as we said, this is a land which we acquired from Tata Communications. The land was leased by MHADA. It’s a MHADA-owned land and have taken the rights of Tata Communications and now we are under development. We have already applied — as we speak, we are already on the verge of just applying for permissions. Hopefully, in the next three to four months’ time, we should be able to get those permissions and we should start construction on the same immediately. So our target is by year-end, but maybe some one or two months here, there but hopefully by then, we should be able to commence work.
Raj Shah — RS Investments — Analyst
And what are the projects that will be planned there?
Dhaval Ajmera — Director
So, it’s a residential project comprising of two, three and four bedroom apartments.
Raj Shah — RS Investments — Analyst
Okay. Any size that you would be probably giving — the total size of the project?
Dhaval Ajmera — Director
So total size is 95,000 square feet of carpet area, which we are selling roughly, and you want to know the individual flat sizes or just the overall size?
Raj Shah — RS Investments — Analyst
No overall size, and what will be the realization [Phonetic] that we will be targeting?
Dhaval Ajmera — Director
So, our target is around INR25,000 to INR27,000 per square feet of carpet area, so, which is about INR250 odd crores plus.
Raj Shah — RS Investments — Analyst
Okay, okay, thanks for that update. And we put a decent growth in this operation numbers. So, can we expect the sustainability to continue for the coming quarters?
Dhaval Ajmera — Director
Well, this quarter was one of our best ones because, we had a great launch run-in for Manhattan. However, our endeavor is to see — while we may not have the same kind of numbers coming every quarter-on-quarter, we are looking with Manhattan now going under sustenance phase, we have our existing projects in Bangalore, Pune and in Greenfinity and Sikova, which is now coming towards the end of its completion. So, we will be looking at great numbers coming from all these projects and even Bangalore project Nucleus is under completion. So, all those put together, we will see a good number coming in. However, it is not going to be as every time, every quarter being the same kind of a number coming. But definitely, with our existing projects and new projects like Ghatkopar and Juhu, we are looking at a great top line in this entire year.
Raj Shah — RS Investments — Analyst
Okay. My last question is still pending, I will be rejoining the queue. If you can share some details on business development opportunities?
Dhaval Ajmera — Director
So as far as business development opportunity is concerned, we are on a constant move to look at some projects, which is under JV/JDA model, and also a lot of discussions are going on under society redevelopment, because that is something which has become our knack, and we are looking at some successes coming in our way very soon. So these are the kinds of models where we are looking at.
Also, some stressed projects coming in from some financial institutions, where we are under discussion. Hopefully, we are looking at clicking a few. So looking at three opportunities, something like stressed project, something like JV/JDA and the third avenue is the redevelopment. So, all aspects, where we are under discussion and talks, and we are hopeful to click a few in the coming months.
Raj Shah — RS Investments — Analyst
Okay. So effectively, we can see like these new initiatives coming through in Q2 or Q3?
Dhaval Ajmera — Director
Well, we never know when this lineup, but hopefully between Q3 and Q4 we should.
Raj Shah — RS Investments — Analyst
Okay. Thanks for the detailed answer. Thanks a lot and wish you all the best.
Operator
Thank you. The next question is from the line of Vipin Taneja as an individual investor. Please go ahead.
Vipin Taneja — Private Investor — Analyst
Sir, am I audible?
Dhaval Ajmera — Director
Yes.
Vipin Taneja — Private Investor — Analyst
Just one thing, you have written an annual report regarding 5x growth. Is it on — the few things have been mentioned, INR4,300 crores — accrue the revenue of INR4,300 crores. Is it the pre-sales of INR4,300 crores in the next two years, or the revenue which will be recognized is going to be INR4,300 crores?
Nitin Bavisi — Chief Financial Officer
It is — INR4,300 crores is the summation of the balance revenue from the existing projects, and as well as the sales value of the to-be-launched and fully to-be sold projects kind of a thing. So, this INR4,300 crores is the revenue number.
Vipin Taneja — Private Investor — Analyst
Is the revenue which will be booked in the P&L account, or the presale numbers sir?
Nitin Bavisi — Chief Financial Officer
As I clarified, it is INR4,300 crores which is going to be the revenue number, going to be booked into the P&L account.
Vipin Taneja — Private Investor — Analyst
P&L account, okay, right sir. Yes, and how many square feet will be selling in the next two years, sir?
Nitin Bavisi — Chief Financial Officer
So, as you have seen our launch pipeline, like we have the existing projects’ inventory available, and we have about a million square feet, which is available to be launched within about four to six quarters kind of a thing. So, both these put together, will definitely — as we have launched the Manhattan Project and we could sale about 25%, about 125,000 square feet and in the quarter 157,000 square feet on the carpet area basis. So that particular, with the existing projects, advanced projects, and ready-to-move-in inventory like the Nucleus Commercial, Nucleus A & B wings, the inventory available; the Greenfinity, and Sikova inventory available, which is the advanced stage of completion, and the launch pipeline, which is the Ghatkopar, and Juhu. These are the few projects and the opportunities we are very confident to clock good numbers, going forward as well.
Vipin Taneja — Private Investor — Analyst
Okay sir. Sir see, in the last few years, last year we did — last year rather, we did a 5 lakh square feet kind of a pre-sales. The last financial year we did like 3.5 lakh. So, with this strong brand name and now we are going to Pune, Bangalore, and Bombay micro markets, so MMR region. So, will we be — that kind of a pipeline will be having per year, 2 million square feet of presales, so can we see that forward two, three years down the line, as we become aggressive?
Dhaval Ajmera — Director
Well, our endeavor is to reach over there and that is where — if you see our entire plan when we look at 5x growth plan, that’s where we are looking at — the 5x growth plan is worth 2.9 million square feet of projects, so which we are looking to recognize or develop over the next four to five years’ time. With new projects coming in and new tie-ups coming in, definitely we will be able to reach. But whether it is 2 million, or 1.5 million, or 1 million, that is where our endeavor is, to definitely move on 5x from what we are. So, we wish to reach there, and that’s where we will target to go.
Vipin Taneja — Private Investor — Analyst
So sir, is the focus more on the affordable segment or the basket of it, or do we — by the end of the day, we target the per square feet realization on the PBT level, how do we take a call on a project sir?
Dhaval Ajmera — Director
So our basic call, definitely — we as Ajmeras are developing projects from probably INR20 lakhs to INR10 crores. So, it is all brackets. It is not that we probably focus on mid-segment or high-end or low-end or affordable, but it depends on every project requirement and project velocity, that is where we look at. Our way of selecting a project is primarily based on its location, its significance, which adds value to our company, and also obviously most important is the bottom line and the return basis on our capital. So, there are certain thresholds which we look at, and that is where — if those tick in the box, we probably select the project.
Vipin Taneja — Private Investor — Analyst
Perfect sir. And sir, with our trends of Mumbai, how can we replicate that towards in Bangalore and Pune, because those are new markets for us> And is the brand Ajmera replicable to Bangalore as well sir?
Dhaval Ajmera — Director
So, obviously, our business started from Mumbai, and we are very much recognized and known as a developer in Mumbai. But having said that, Bangalore also has been setting foot of [Phonetic] operations over the last 10 to 15 years and we are — we have done and delivered more than about 3 million square feet in Bangalore. So, we may not be doing very-very great in large projects, but we continue to do our operations of half a million square feet or probably 700,000 square feet, which currently our two projects are, that is Nucleus, then Lugaano, Florenza and all of that. So, that’s where we tend to continue doing it and we feel that you know, that kind of velocity helps in our sustainable growth in micro markets like Bangalore, however, we are open for bigger or better projects coming our way, but we continue to run our operations in this odd manner.
Vipin Taneja — Private Investor — Analyst
And sir your recent announcement on redevelopment as well in the annual report.
Dhaval Ajmera — Director
Your voice is not audible, Vipin.
Vipin Taneja — Private Investor — Analyst
Your redevelopment, you have mentioned about the redevelopment project in the annual report. Am I audible now? I hope I am audible?
Dhaval Ajmera — Director
Yeah, yeah, yeah, better.
Vipin Taneja — Private Investor — Analyst
So in the redevelopment, sir, what exactly are your thoughts? Because not everybody is successful in this model. So, what kind of segment are we targeting in redevelopment sir?
Dhaval Ajmera — Director
So, as I said, today any development or any buyer or a customer, be it a tenant, be it the society, be it a new buyer, they have more preference towards developers who have been in this business since long, who have delivered and who are primarily also, let’s say, they are listed, it ticks their boxes more, they get better comfort because of the transparency, their efficiencies, and their openness to be — for whatever businesses they are doing.
So, we at Ajmera believe a lot in transparency and being very open-minded and that’s where we are looking at a good amount of new redevelopment projects coming our way, and that is where we see that last year with the kind of government support, which was there in terms of reduction in premiums which were there, that helped us grab this opportunity of Juhu redevelopment, and that’s how we are now looking at a few and hopeful to see things should materialize going forward.
Vipin Taneja — Private Investor — Analyst
Is there more clarity of land title in redevelopment, that also interests us?
Dhaval Ajmera — Director
Yeah, because primarily all these land titles are more or less clear because they are at least 30, 40, 50 years old building, society has been done. Wherever we go hopefully, obviously, we check but the title issues are minimal as compared to probably looking at the land outside. So, it gives us an edge but obviously, it is you know, the number of tenants which we have to deal with. But that’s okay, that’s part and parcel of our business which we continue to do because, at least legal wise, things are clearer probably than another land.
Vipin Taneja — Private Investor — Analyst
Okay. And sir any thoughts on the redevelopment of clusters because the government has come out with a policy?
Dhaval Ajmera — Director
So, we are in talks with a few projects where we can apply cluster redevelopment. Hopefully, if things materialize, we can probably announce soon. But definitely, it is a policy-based matter, in which we are — wherever applicable, we are trying to extract the best out of it, and looking at a few on that lines.
Vipin Taneja — Private Investor — Analyst
Commercial also would be there?
Dhaval Ajmera — Director
No, we primarily have more residential.
Vipin Taneja — Private Investor — Analyst
No, but will it be comprising of some part of commercial, so that the returns become handsome?
Dhaval Ajmera — Director
It primarily is more like a convenient shopping, but most of the society redevelopments, unless they are on the main road or something like that, it is more of an enclosed residential development. So, primary, all these are more residential.
Vipin Taneja — Private Investor — Analyst
Highly obliged for your time, sir. Thank you so much.
Operator
Thank you. [Operator Instructions]. The next question is from the line of Mihir Desai from Desai Investments. Please go ahead.
Mihir Desai — Desai Investments — Analyst
Thank you for the opportunity sir. I had one macro question. So basically as the industry is looking, the inventory is coming low, so how this will affect the industry, I just wanted a take from you?
Dhaval Ajmera — Director
Sorry, how has it affected what, the inventory?
Mihir Desai — Desai Investments — Analyst
Yeah. So as the inventory is coming down sir overall, so now, do you see that there will be new launches and the realizations also will go up because the demand is still intact?
Dhaval Ajmera — Director
Well, my take is that real estate has a good steady demand, at least what I see in the city of Mumbai. With the new launches or old launches which were there, a lot of inventory has almost been sold out, ready stock has almost been wiped out from the market. Going forward with last year, there was a good amount of premiums which have been paid by developers and a good number of launches are expected or being done, as we did our Manhattan Project and obviously now, we are doing our — going to launch our Juhu project. That’s how we are seeing a lot of other developers also launching a good amount of projects.
So, I think overall demand is there. Prices probably may remain steady. It may not increase too much with the supply coming up, but I think with this current pricing and if the sales become steady, I think everyone should be in a happy place.
Mihir Desai — Desai Investments — Analyst
Okay. And as the prevailing inflation and rising interest costs, will that impact the demand, what is your take on this — on a consumer point of view?
Dhaval Ajmera — Director
So my take is, consumers are averse to, at least personally I feel, if the home loans are around 7.5% to 7.75% brackets, I think they still be okay. Sometimes it means — psychologically if it crosses 8%, then there will probably be a little thing to worry about. I would see that there will be resistance coming up, and then there will be a demand-supply gap which will be starting. But I think the government is doing a good job by keeping the home loan, obviously they have increased but not making it as proportionate to the incremental inflation.
So I think overall, it is a good thing and it’s a good sign because real estate indirectly supports 220-250 other industries, which is probably not getting affected today and we are seeing our cycle moving. So, I think my personal take is, so far as 7%, 7.5%, and 7.75% as a percentage, I think that should still be okay, but beyond that, probably we will see resistance. But so far, it has been good.
Mihir Desai — Desai Investments — Analyst
Understood sir. And lastly on the land acquisition, as the prices of land are also going up, so, do you think that will affect the further new launches going forward in the industry per se?
Dhaval Ajmera — Director
Well as land prices, honestly, it is more of a demand/supply thing. But right now, in the city of Mumbai, there are a lot of developments like JV/JDA or DM model project coming up or some stressed projects coming up or society redevelopment. So which does not imply to probably big amount of money outflow upfront — front ended, but obviously there will be — while mid-cycle of the project, you need to pay for the premiums and permissions. But overall, I think there is a good amount of supply still available for JV/JDA and society redevelopment projects in Mumbai.
Mihir Desai — Desai Investments — Analyst
Understood.
Operator
Sir, for further questions, rejoin the queue.
Mihir Desai — Desai Investments — Analyst
Sure.
Operator
Thank you. [Operator Instructions] The next question is from the line of Pankaj Tanna from Varun Investments. Please go ahead.
Pankaj Tanna — Varun Investments — Analyst
Good afternoon sir. I just wanted to know whether there is any clarity on the location of your Central Mumbai project where you say it is around 489,000 square feet launch, probably March 2023 I think the brochure said. So, which is the location that is there?
Dhaval Ajmera — Director
Well as I would love to say, but I just do not want to reveal right now. When the right time is there, we will be definitely revealing. We just — are in the last stages of our permissions and approvals and finalization of documents. So let us complete that, and then we will announce it. Just in central Mumbai is all I can reveal right now but going beyond that will be once we sign on the dotted lines.
Pankaj Tanna — Varun Investments — Analyst
Okay, so central Mumbai would be what Ghatkopar, that area?
Dhaval Ajmera — Director
That entire central part of Mumbai, starting from probably Dadar going all the way to Mulund.
Pankaj Tanna — Varun Investments — Analyst
Okay. And otherwise — I mean, that is one thing that I wanted. And the similar, there is a second project that’s mixed use, that’s also in the same area?
Dhaval Ajmera — Director
Yeah, in and around that.
Pankaj Tanna — Varun Investments — Analyst
Okay, so basically, these are the two projects, which are still being worked on?
Dhaval Ajmera — Director
Yes.
Pankaj Tanna — Varun Investments — Analyst
And any plans to start something after, let’s say, you have reached a threshold of 60% booking on your Manhattan at Wadala?
Dhaval Ajmera — Director
Yes, of course, because Wadala has a good potential and we have a great amount of FSI available over there. So definitely, we are looking at a Tower 2 launch, which should — in our opinion should happen soon once, as you rightly said, we reach 60%-70% of our sales, that is when we open tower 2.
Pankaj Tanna — Varun Investments — Analyst
And for that also when you launch, you need to pay the development charges of INR280 crores, INR270 crores for a similar tower to the authorities or no?
Dhaval Ajmera — Director
In fact, it will be a little more, because when we paid last time, we paid it with a discount of 50% premiums. Now those opportunity is not there, so obviously there will be a bit — not all charges are going to be 100%, but some will be. So my guess is, depends on the sizing and all of that, but with INR280 crores will be around INR400 crores if it was the same size, just to give you a rough figure.
Pankaj Tanna — Varun Investments — Analyst
Okay. Effectively today, whatever the inventory you are selling people should buy it at whatever rate you are getting. But the next pricing will be high about INR3,000, if nothing else?
Dhaval Ajmera — Director
Absolutely, that’s what we have — that will be, because the price will rise the cost will rise, and obviously the end product price will also be up.
Pankaj Tanna — Varun Investments — Analyst
Okay, great. And when do you plan to take in the sales for Greenfinity which is balanced, and Sikova by the second, third quarter this year?
Dhaval Ajmera — Director
By this financial year end, we should be able to compete both the projects in terms of completions, in terms of sales also.
Pankaj Tanna — Varun Investments — Analyst
Wow that would be great, and I think that’s all I have to say all the best. Keep doing the good work that you are doing.
Dhaval Ajmera — Director
Thank you.
Operator
Thank you. The next question is from the line of Anushka Atri as an individual investor, please go ahead.
Anushka Atri — Private Investor — Analyst
Thank you for the opportunity, sir. Sir in the presentation it is mentioned that we have 4 launches in the next two years. So, would you be able to give details of the same in terms of location, size, or timelines?
Nitin Bavisi — Chief Financial Officer
So, we have mentioned the sizes of the projects and as well as the code name, and the location Ghatkopar and Juhu, and as we speak, we have already discussed at length about the Juhu, its progress, we received the CC that we applied for RERA and that particular launch is around the corner, as we complete this regulatory process, and so is the case with Ghatkopar, we have completed the acquisition from Tata Communication as we speak, and alongside we have already started our work on the plans and other regulatory aspects about the approvals.
So, in terms of the other two projects that we have kept our preparedness on, and we are hopeful to bring these launches as well in the given timelines, and we will keep the momentum of our launches accordingly.
Anushka Atri — Private Investor — Analyst
That’s great. That’s very good to hear. Sir secondly, in the last two presentations, we have been seeing some ESG-related activities happening. So do we have a roadmap or do you have any kind of ESG recognition as of now?
Nitin Bavisi — Chief Financial Officer
So, as we speak, we have taken a few execution-based initiatives at the site, be it using of the raw material, be it water conservation, be it energy efficient materials, and such kind of a thing. And in terms of the social angle, we have been mindful of taking the very relevant programs for the society and their beneficial, be it for malnutrition, for woman’s empowerment and such kind of vocational education programs and conservation of water resources, and in terms of governance, we always have been ticking all the boxes in terms of compliance is of LODR, SEBI regulations, and RERA now being the regulator kind of a thing.
So, our focus is completely on the entire ESG path, and we have received a few recognitions out of our efforts, be it the Nucleus, which has — be it an Edge certification, be it Zeon which is IGBC certification kind of a thing. So, we are very grateful for our appreciation of our sincere efforts on this ESG side also.
Anushka Atri — Private Investor — Analyst
Got it, sir. That’s great. Thank you. And sir one last one, is there an update on the NCLT regulatory proceedings since last quarter?
Nitin Bavisi — Chief Financial Officer
Yeah so last two hearings, we could not get our petition on the board for the hearing as I mentioned on the earlier question, it’s my response that we are very hopeful being very plain vanilla demerger scheme. So we are hopeful that once it comes on board, it should be getting through and we should be having the asset parcel traveling into SPV and we can do the rest of the thing, as per our plans.
Anushka Atri — Private Investor — Analyst
Got it, sir. Okay. All right. Thank you. That’s it from my side and good luck.
Nitin Bavisi — Chief Financial Officer
Thank you.
Anushka Atri — Private Investor — Analyst
Thank you so much.
Operator
Thank you. Ladies and gentlemen, we will take the next question from the line of Ritesh Kamdar as a shareholder. Please go ahead. Ritesh, your line is unmuted.
Ritesh Kamdar — Private Investor — Analyst
Hello, can you hear me?
Nitin Bavisi — Chief Financial Officer
Yes Ritesh.
Ritesh Kamdar — Private Investor — Analyst
Are we looking for any private equity in the company or any of its SPVs?
Nitin Bavisi — Chief Financial Officer
Yes, we are mindful that you know what private equity players and the deals can make overall credentials about our product portfolio. However, we are as well you know, playing a balancing act on our available cost of debt, because as you know that, the repo rate and the overall cost of debt is also increasing. So, we need to be mindful of the overall cost side also, because overall we are working on the inflationary pressure.
So, we are playing balance on the credentials of the private equity and as well on the cost side. So, we are taking a very judicious business case and the decisions accordingly for the funding of the project. Okay, thank you.
Operator
Thank you. For the follow-up question from Pankaj Tanna from Varun investments, please go ahead.
Pankaj Tanna — Varun Investments — Analyst
Yeah, just one add-on, on that demerger plot or property that you are planning, is that — are you planning a purely residential or it will be a purely commercial business center sort of thing?
Dhaval Ajmera — Director
It’s going to be a mixed bag. I mean, as of now, we have looked at about 3 million odd square feet of commercial coming in, but we will still explore it as and how, once it’s done. But right now it is under the planning of 3 million square feet of commercial.
Pankaj Tanna — Varun Investments — Analyst
Okay. But being at Wadala, isn’t residential probably a better sort of — I mean, you probably know better?
Dhaval Ajmera — Director
See we already have a good amount of supply in residential over there. So, for us as a layout, and when the land is such big, I think it is a mixed-use development as — contains or commands more demand as compared to just residential or just commercial. So, we are trying to make this as efficient as possible, to have like a mixed-use place, which is work from home and that way, walk to work culture. Looking at all those in a city like Mumbai is what we endeavor to develop over there.
Pankaj Tanna — Varun Investments — Analyst
So, it is something that you plan to do independently or you do it with some fancy developer from Singapore or something.
Dhaval Ajmera — Director
We are open for that. We have not like — since we are under this development, we are at — looking at either — we are open with some private equity or someone else as an investor coming in together, who brings or adds value to the project. Definitely, we would look at this tie-up.
Pankaj Tanna — Varun Investments — Analyst
Okay, thanks Dhaval.
Dhaval Ajmera — Director
Thank you.
Operator
Thank you, ladies and gentlemen, that would be our last question for today. I now hand the conference over to Mr. Nitin for closing comments, thank you and over to you sir.
Nitin Bavisi — Chief Financial Officer
I really thank every participant and their questions and suggestions and insightful questions which will definitely help us and motivate us for putting in better performance and coming back with a very good set of numbers. Until then, stay safe and stay happy. Thank you.
Operator
[Operator Closing Remarks]