Mahindra Lifespace Developers Limited (NSE: MAHLIFE) Q2 2025 Earnings Call dated Oct. 28, 2024
Corporate Participants:
Amit Kumar Sinha — Managing Director & CEO
Avinash Bapat — Chief Financial Officer
Analysts:
Rakesh Wadhwani — Analyst
Prem Khurana — Analyst
Parikshit Kandpal — Analyst
Bharat Sheth — Analyst
Ronald Siyoni — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Mahindra Lifespace Developers Limited Q2 FY ’25 Earnings Conference Call. [Operator Instructions] There will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.
We have with us on this call today, Mr. Amit Kumar Sinha, MD and CEO; Mr. Avinash Bapat, CFO; Mr. Kumar Sriram, Vice President, FP&A Costing and IR; and Mr. Rabindra Basu, Head of Investor Relations. I would now like to hand the conference over to Mr. Amit Kumar Sinha, MD and CEO. Thank you, and over to you, sir.
Amit Kumar Sinha — Managing Director & CEO
Thank you, Michel. Good morning, everyone, and welcome to our quarter two FY ‘2 earnings call. At the outset, I would like to thank everyone for participating in this conference call. And I also want to wish all of you happy Diwali and season greetings to you and your families. Let me cover CFO [Phonetic] first I’ll quickly cover some of our learnings on the market, then I’ll cover a highlights of our sales launches, business development and our IC and IC business. And then subsequently, I’ll hand over to Avinash for the financials, and then we’ll take on any questions that you might have.
So let me just quickly cover on the industry part. The — yeah all of you know very well so I will go through it briskly, now the industry continues to remain healthy, and overall strong absorption growth across the markets. Some markets which where we don’t participate seems to be slowing down a little bit, especially NCR and Hyderabad. But overall, there is a stable market all along. The momentum in the residential market is there if you see the overall quarterly sales, I think very high numbers that we noted 87,000 units were sold in this quarter, which is a good growth over the last — similar period financial year. Very good launch pipeline across all of players. Quarter three calendar year, which is quarter two financial year was also very good from a launch perspective. The overall positive news that we carefully watch is the inventory level.
We look at the inventory overhang. It’s at 14 months at the end of nine months of 2024. And overall, I think the mortgage payment to monthly income ratio is also very stable across the markets across the country. The Mumbai and Pune markets for the highest volume some units launched in quarter two FY ’24 which is quarter three, 2024. The — together, they constituted roughly 43% of the units launched during the quarter. So overall healthy market, Mumbai and Pune, as you know, is a big priority for all of us. And the Mark [Phonetic] highlights very good absorption, 9% year-on-year growth and new launches were also very healthy. Pricing continues to be at 6% growth compared to last financial year — same period last financial year and similar positive trends that we see in Pune as well as an impact in Bangalore, what we see is absorption seems to be at one of the highest levels and they’re outpacing the new launches. And as a result of pricing is seeing much higher growth, close to 10% year-over-year. So a very healthy market.
We see some pockets of slowdown, as I mentioned, not degrowth, but actually the reduced growth rate that we see in a couple of markets that I mentioned earlier. The other part is our industrial business, which we — which had a great first half of the year for us, the manufacturing unit [Phonetic] pushed by the government, Viksit Bharat all the announcements on the infrastructure side, including the 12 industry parts through National Industrial Corridor Development Program, NICDP, which was announced in our budget in earlier this year and the National Industrial Corridor Program, all those things are very, very healthy. Already a lot of spend has happened, and we continue to see more and more off-spending [Indecipherable] from in the infrastructure.
We also see a lot of global players trying to find home for themselves to set up manufacturing or industrial units in India. We have also seen many domestic companies, scale via presence in India for new opportunities, new industrial or new manufacturing setups as well as the capacity enhancement. So overall, we see that industrial part continues to be super exciting for us as well. Now let me just cover the sales part. Let me cover both H1 as well as Q2. We achieved a resale of in H1, INR1,415 crores versus last H1, which was INR800 crores. So this is roughly 77%, 78% growth comparing for the similar period last. In the quarter, quarter two financial year tends to be slow because of multiple reasons, seasonality, there were deals that were lost to shraad [Phonetic] and many other reasons.
So we’ll see, we have a INR397 crores in quarter two FY ’25 versus INR455 crores in the last financial year. But we have — we have more and more launches in later part of the year. Our new launch sales contributed roughly INR931 crores of the INR1,400 that you have seen and also some healthy quarter two revenues came from sustainable sales. H2 has always been great for us as we saw in the last financial year. We have lots of launches which are in advanced low approvals and launch readiness. So you see lot more exciting news coming from us on the sales side which I’m covering in the next section, which is launches. Actual launch was benefited from some of our outstanding projects that we launched earlier in the year. Mahindra then in Bangalore is almost sold out 207 units out of 228 units are sold. Mahindra Crown, code name Crown in Pune, similar response. We have 56% of inventories already sold down. Our second quarter development in Chennai has also received a very strong response and we continue to sell them. We have launched a new tower in the holiday, which is Tower A which is valued INR825 crores. Kalyan 2, Phase 2 was launched, which has leading [Phonetic] of roughly INR225 crores.
With the quarter and H2 ahead for us, we are planning Phase 2 of Vista given the success we had in Vista Phase 1 and [Indecipherable], we are just moving that up. We’re also moving Crown Phase 2, Codename Crown Phase 2 in Pune. Zen 2 in the pipeline in Bangalore, the Alembic Whitefield line that we acquired in March earlier this year, that is also in the last stages of final stages approval. Similarly, Codename Navy [Phonetic] in Malad, is also in the final stages of approval. That is our first — that is our first society redevelopment launch. We also have a plotted project in ink, which is waiting for final approval. This is a plotted development in our Mahindra Walled city, Jaipur. All in all, lots and lots of launches that we have planned for H2, and we’re getting ready to maximize our sale through those launches.
Business development, as I covered in the previous, we are getting a lot of deals, a good set of deals that we are triaging very carefully, thoughtfully the expectations on the land owner tends to be very high in low markets. So we are going through all the deals very carefully and making sure that we have the ability to get the threshold returns we expect from each of our projects and that’s roughly going well. So in the first half, we had 2,050 which is the society redevelopment project that we won in Borivali [Indecipherable], and a small parcel land we had acquired next to Zen in Bangalore. So those are the two, we have a very healthy pipeline, and we continue to hear more news from us in the next few months.
Finally, on the IC and IC side. IC and IC business has done really well for us. It has given us at H1 as I mentioned, because of the domestic as well as global interest excitement that we are seeing for India. We had INR163 crores of revenue coming from leasing of 635 [Phonetic] acres of land in Walled City Jaipur and Chennai, and we’ll continue to find more clients in that spirit. A lot of exciting pipeline for us that exists for us to offer our land and services to all of our clients. In some areas, we are running out of land, but we are creating expansion opportunities with our partners. Quarter two was also — quarter two specifically FY ’25 was strong for us. We had — of the INR163 crores, INR87 crores came from — came in quarter two, which is mostly from Jaipur and a little bit support from Chennai — Mahindra World City, Chennai. I’ll ask Avinash to cover all the financial detail. But I think if you look at the health of the business is quite strong, which is reflected in our cash flows.
I think we had one of the best first half and compared to last year first half we more than doubled our cash flows, operating cash flow. So we’ll cover more of that in detail. But business continues to be strong, healthy pipeline, both from the industrial side as well on the sales side, some slowdown that we saw in the quarter two for residential sales, but we’ll then make it up in the next two quarters. So Avinash, over to you.
Avinash Bapat — Chief Financial Officer
Hey there, thanks Amit. I’ll cover the financials. And as you all know, many of our operating entities, be it from residential business like Mahindra Homes or Mahindra Happinest and even IC and IC business, which is the World City, Chennai or World City etc., are not consolidated on a line-by-line basis. So we basically have a share of net profit or loss from the JV are associates. So we cast our accounts based on IndAS which are now in public domain.
So let’s talk about a few lines on H1 performance and then move to Q2 and a little bit about cash flow, which Amit alluded to. So if I look at H1, the consolidated operating income is about INR196 crores which is almost 70% higher than H1 of FY ’24. And you’ll notice that some of the cost line items such as employee costs and fixed costs have gone up. But those are exactly in line with how the business has grown in the last 12 months specifically. If you look at share of JVs and associates, that profit has actually tripled to INR73 crores from a base of INR25 crores in H1 FY ’24. The PAT has also shown an improvement. It’s at a negative INR1 crore as compared to only INR823 crores in H1 FY ’24.
Calling out specifically with respect to quarter two, the consolidated total income year stands at about INR16 crores. This is slightly lower as compared to INR25 crores or INR25.7 crores to be precise in Q2 of ’24. The share of JVs and [Phonetic] associates in Q2 as well is up at INR36 crores as compared to INR1 crore in the corresponding quarter of the previous year. The consolidated PAT after the non-controlling interest, etc., stood at a loss of INR14 crores and that’s how the H1 is at minus one from our overall H1 performance perspective. This is actually against a loss of INR19 crores in Q2 of FY ’24. The operating cash flow, which is what Amit talked about earlier, which we measure excluding the cash outflows related to land was almost INR261 crores in Q2 of FY ’25. This was as compared to Q2 of FY ’24, much higher. It was at INR118 crores through FY ’24. So cumulatively for H1 of FY ’25. We have operating cash flow of very close to INR550 crores or INR548 crores to be precise, almost two times of what was recorded in H1 of FY ’25. So it is INR249 crores versus INR548 crores.
This is reflecting the strong collections in our residential business as well as the strong performance of the IC business as we spoke earlier. In all, the net debt of the company now stands at INR477 crores on a consolidated basis. And this now on a net debt to equity is at 0.26 on fully consolidated the stores improved over we saw in March ’24. In fact, the costs with respect to interest have, in fact, come down in Q2. If I look at Q1 of FY ’25 as against Q2 of FY ’25, our borrowing net cost — our weighted average cost, as we call it stands at 8.83. And that is actually down by 13 basis points as compared to Q1 of FY ’25. So overall, the strength is reflected in the cash flows, as mentioned earlier. And that’s what we have for the financials. So leave it open for questions if any and take them.
Questions and Answers:
Operator
Thank you very much sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Rakesh from Nine Rivers Capital. Please go ahead.
Rakesh Wadhwani
Hi, am I audible?
Operator
Yes sir, please proceed.
Rakesh Wadhwani
Hi, good morning and thank you for the opportunity. Sir, a couple of questions from my side. In the opening remarks, you mentioned the number of projects that will be launched in H2. Can you please talk about the name of the project and the GDV [Phonetic]? So few of the projects that I could understand one is Kandivali project Vista, new project in Borivali West and Malad. If you can give in detail what is the actual launch cycling in H2 and the value of that, that will be great.
Amit Kumar Sinha
Yeah. So let me just give you a quick indicative value, Rakesh, on that. So, Vista will have roughly more than — more than INR1,000 crores of inventory. I think we haven’t decided when we launched the retail part of it, but the residential part would be between 1,200-plus minus that will be launched. That’s one. The Code name [Indecipherable] in Malad is roughly INR1,000 crores. That’s another large project for us. We have gotten — we are there in terms of getting all the concessions and approvals, but it’s a little bit complicated given multiple plots involved and so many residents from the society involved so final stages of that. So that’s the number two.
Third project Crown. Crown will have roughly — we have started the process of getting approval. My sense is we’ll decide exactly when to launch because we have around 30%, 40% inventory. That’s there. So — but roughly INR800 crores worth of inventory is going to be launched in Crown Phase 2, INR600 crores or INR1,400 crore project. 600 will be launched earlier and remaining 800 would be launched. That’s the third one.
And the fourth one, Pink is roughly — Pink in Jaipur is INR200 crore plot in plotted development. And then to Bangalore is roughly INR250 crores to INR300 crores. Olympic is something that I’ll get back because — the timing of that depends on multiple factors. The approval process, it goes through BTA, BBMP. There are some issues in Bangalore right now, not for us, for the industry. So, the value of Olympic Phase 1 would be around INR700 to INR800 or INR900 and the total project is INR1,800, but we’ll decide whether we want to launch the project in one shot or do it in phases. If you were to do in one shot, we’ll just look at the industry situation and our readiness completely. So those are the few — those are means that had covered Rakesh. Hopefully, that answers your question.
Rakesh Wadhwani
Yes, sir, yes sir, got it sir. Thank you. Sir coming to, coming to second question [Indecipherable] see in this quarter, one of the reason for lower pre-sales or lesser number of launches the company. But if I see the projects which are already launched, there’s also some kind of slow growth, especially when it comes to the Kalyan market or another market. Your thoughts on that?
Amit Kumar Sinha
Yeah, so — yeah so, you’re absolutely right. My sense is pre-sales growth is linked to the number of launches because you get the biggest bang for the buck when you have a launch. We had a couple of — at least one launch that was planned in quarter two which is deferred down from an approval point of view. Our readiness is 100%, but just waiting for some approvals. So that’s the first part of that, if we have more launches automatically it will augment the pre-sales. And we’ve seen that in the past financial years, past quarters as well.
On the affordable side, we are value home side, which you are trying to cover on Kalyan and a little bit on Palghar side. Yeah, so I think as we have seen the affordable segment has been slower than premium, mid-premium and let’s say even luxury, which we don’t participate. And they are affected by, let’s say, high interest rates and many other factors which have affected the bottom of the pyramid, relatively speaking. But if I look at my Palghar Phase 2, we have sold almost 75 units in this past quarter. The value of that is not fully captured in the number that you get captured in the subsequent quarters. But 75 units in three-plus months is very, very good. Similarly in Kalyan, we are making good progress. I think the pickup in inventory is happening. We have to just price it right and make sure that people, customers understand our value proposition. But the value of that is very small, roughly, because of the affordable each of the segment.
Rakesh Wadhwani
Okay, sir. Got it. Sir, one last question from my side. With respect to the new business development, we had guided in the last year, this year, new business development will be much higher last year the business development. So, any thoughts — any guidelines with respect to new business development in FY ’25 and FY ’26 and along with that the land process we have in [Indecipherable] from my side.
Amit Kumar Sinha
Yeah, no. That’s a good question and it’s a broad question. I think let me answer at a conceptual level first. The — the last year, we did INR4,400 crores of EBV, for us to maintain our growth, actually, we need to definitely surpass that. So that’s our target, what we have done in the past year. However, we want to be very careful not to be in the deal fever given where the market is today. Every deal that we see — and we are very glad that we are seeing good number of deals. And or at least we are many times first quarter call for many of the deals that I mentioned in the previous call also. We are applying a very, very strong financial lens to all the projects if the expectations about land prices is very high and the pricing and the cost thing doesn’t work out for us, we end up seeing no two projects. And then we have said that after going through the details, after initial term sheet also, we have said no to the projects because we just don’t think that they will serve us and our shareholders well if we sign a bad deal just for chasing the deals, right?
So my sense is we will set the right deals, and there is lot in the pipeline. We don’t have a dirt [Phonetic] of deals in the pipeline. We just hope to close the right ones so and you keep you updated as more of these deal announcements happen over the next weeks, months and years. So that will be a short answer to FY ’25 and ’26. We’ll follow the same thing. We will be careful about signing the right deals. And then about Thane, Rakesh as you said, Thane approval processes are very cumbersome. I think in the past, we talked 631a exit [Phonetic], etc. That’s done. The next set of approvals are underway. Our goal is to launch at the earliest, but given the elections and national elections, now state elections and many changes that keep happening. We — I just don’t want to give you any unreasonable time line that we can’t meet. My sense is it will take another 12 months to 18 months for us to bring that to the market.
Rakesh Wadhwani
Okay. That’s from my side. Thank you and Diwali wishes to you and your team. Thank you.
Amit Kumar Sinha
Thanks, Rakesh. Best to you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Prem Khurana from Anand Rathi Shares and Stock Brokers. Please go ahead.
Prem Khurana
Yeah, thank you for taking my questions, sir. Sir, two questions. One was, I mean, if you could understand where are we in terms of approval process of Santacruz — and I end up with acquisition over our past project in terms of on the redevelopment side, but they see the [Indecipherable] should be going faster than Santacruz.
Amit Kumar Sinha
Yeah. Thanks, Prem. And I think in full transparency, you’re right, it’s moving slower than what we wanted it to be for the first one. Our second and third seem to be moving faster than the first one. The reason is the following, and this is a learning for us. This is a roughly INR500 crore project, not very large, but it is an amalgamation of two different societies NextEra and WestView [Phonetic]. And they have two different management committee and two different lawyers, two different set of stakeholders. And that has taken a lot of time to — with alignment — with them to get all the things done are aligned in a definitive agreement. So that’s something that’s taken time.
I think — I don’t think we have reached the stage of getting even approvals right now. We’re still trying to get both the societies to agree. And hopefully, it will happen in the final stages for the last two, three months, one or two clauses that have affected us, but hopefully, it will close as well.
Prem Khurana
Sure. But sir, I mean, given the fact that even Borivali seems to be a combinative [Indecipherable] society. I mean, have you been a little careful in structuring the transaction this time around compared to — and the way it’s been with Santacruz?
Amit Kumar Sinha
Hi, Prem, your voice wasn’t clear. Can you repeat the question?
Prem Khurana
I was asking, I mean, as far as Borivali is concerned, the recent projects have been able to manage. There again, you have multiple societies involved, right? With Santacruz dealing with only two societies, in case of Borivali, these would be seven odd societies.
Amit Kumar Sinha
Correct, correct, correct.
Prem Khurana
Have you made changes in the way we approach the redevelopment where I mean you would require some deal with multiple societies or even more even you could run the same sort of risk where and maybe take it could take you some time to kind of get them on board?
Amit Kumar Sinha
Yeah, yeah — that’s a great question, actually, and I’m glad you asked. The Borivali societies are part of cluster redevelopment. So they win together and they lose together, right? Whereas the West Era [Phonetic] is where the relationship between society is not very — I would say, constructive as we have seen. And that is causing the problem because somebody’s gain is somebody’s loss potentially as perceived, whereas in Borivali, that’s not the case, right? If they stick together, they all benefit.
And we also applied learnings from West Era [Phonetic] that how to actually get the key terms, which are typically of dispute or negotiation sort it out sooner rather than later. And that’s also helping us in terms of moving the speed along. Our hope is that Borivali will move faster because they’ve been stuck for a long time and they have realized the value of that whether they should be aligned or they should keep fighting. I think, hopefully, the same wisdom will prevail with some of the other situations, including at West era [Phonetic].
Prem Khurana
Sure. And sir, one question on IC and IC, sir I remember like whenever we used to lease out some land, I mean, we used to give some time to our tenants get processing unit in place. But I mean, how I see it is eventually we have 147-odd customers in case of the airport. Already seems to have commission operations, there are 50-odd, I mean given in the land or they’re taking the land on lease, but in there yet [Phonetic], I mean — commence operations. So how do we — the idea would have been made them cooperating in the areas possible so that you are able to create some sort of employment, some sort of economic activity, which would help get more than is right. But it’s been a [Indecipherable] it’s taken a little longer than I would have visage them start working the ground. So why would the situation be there?
Amit Kumar Sinha
Yeah. I think it’s a mixed question. We — I think we track that data very carefully. And even so in the last few months, we also were very exclusive with our partner Rico [Phonetic] to highlight why we need help from them. In the past 12 months, we have also taken land back from those customers or clients who signed up for land and didn’t do anything for the longest period of time. We’ve also given notice to a few.
So absolutely right. We are doing the cleanup. But the number that you have in terms of 50 is slightly different as we track it. There are many who are in the planning stage, and we’re carefully tracking that. There are others who are awaiting the approval for doing the construction. And then there are few who have actually started something and they have — then waiting for, it is a capital or some other approvals, etc. So if you exclude all these which are in the pipeline, we have no intent issue, if I can call it, it’s less than five or six who have not done anything as of now and we are tracking each one of them and pushing them along to start the work or give the land back to us. And since we have already done the land buyback, so to say, we are — all the customers or the clients understand that this is something that they need to take it seriously. Otherwise, they’ll find it very difficult to retain in land and not do any activity.
Prem Khurana
Thank you and all the very best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Hi Mr. Sinha, congratulations in a decent quarter. So my first question is on business development. And I think last time you had mentioned we are setting up a platform.
So first of all, on the leverage side, the debt has gone up. So how much further do we have in terms of absolute debt, what are the levels which we’ll be comfortable with to take share of business development as we get some opportunities on land side? And secondly, on the platform — any update there, if you can help us understand whether once the platform, what kind of structure the platform have, I mean will you contribute equity from here or the parent will contribute? And why is the parent not looking at directly doing [Indecipherable] getting funds and the MDA level because that will also help us on our network and then further leveraging that work to do business development.
Amit Kumar Sinha
Yeah. No, great questions, Parikshit, as always, and thanks for your comment. I think there are three questions that you asked me, let me answer them sequentially. I think in terms of the deals, right, first question was on the deal side. I think we have continue to — hopefully, you’ll hear positive news when we find the right deal. I think, as I mentioned, we have a good pipeline, difficult — if I could close, if I wanted to close like two, three deals, I can close it tomorrow, to be honest, but we’re going through all the financial and legal all the diligences that are required for us to make sure that those are good investments for us. So I’m actually not worried too much about the business development. This was a very last year for us, and you’ve seen how much we scale with people and resources and our own invest to actually address that.
But as I mentioned in my upfront comment that the expectations of some of the landowners are very unreasonable at times and is better to walk away. Let market cool off. Let’s see what’s happening in Delhi now the land prices are cooling off now because everybody realized that the prices are unreasonable for launches and then same thing for Hyderabad, as you know right? On the least, I’m less worried about that, right?
On the platform, I think advanced stages of even discussion, but these are — let me put it this way. They are quite confidential right now. I would hate to give the names now or the leads of when they will conclude. I think I would say that we’re making good progress. This — no promises, but at least this quarter, we should see a closure on at least one [Indecipherable] or the other discussion fructifying or not. So that’s something we’ll keep you updated, right. So that is the second one.
Third one, I think you’re absolutely right. We analyzed and shared in our board the kind of equity and the debt that has been raised. And our parent is looking into it. But right now, from our own MLDL perspective, we have the ability to actually fund in the platform, the right amount of equity appropriately. Our debt-to-equity ratio is still very conservative. We were at 0.35, 0.36 at the end of [Indecipherable] March. Now we are 0.26, right. So we want to keep it conservative, and we work very closely with our group treasury to make sure that we are — we continue to be conservative on that front. We don’t want to use debt. Debt is needed, but is it like a necessary evil, but you have to be very careful given the business that we’ve done, right? So we are very cognizant of that and very conservative. So that’s where we are. I don’t know Avinash, do you want to add anything?
Avinash Bapat
Yeah. I mean you mentioned about overall debt going up, actually, that’s on the gross level, Parikshit if we look at it, it’s gone up only by about INR30 crores. The net — the debt stands at INR477 crores, which is pretty healthy, as Amit mentioned. 0.26 is what we convert to from a net debt ratio. And I mean, typically, if we look at some of the comparative players in the market, the net debt-to-equity ratios are way higher than this going up to 0.6 or 1.8% at some point in time. We’ve in the past mentioned that we want to be conservative here, not go beyond the threshold of, say, 0.5 or slightly higher than that. But we want to be conservative. So there is legroom available in terms of fund rates, and that’s where we would look at funding output.
Parikshit Kandpal
So Amit, my another question was whenever this structure is in place as and when you are ready to announce it so will that be the only structure where you will raise funds to deploy and land or you have the option to directly also achieve land wherein MLDL level, you can buy outright lands.
Amit Kumar Sinha
Yeah. Yeah. I think we will have the flexibility, absolutely. But what I’ve seen of our efforts it is [Phonetic] just aligned with our partner typically. And even though we have the structural flexibility to do things beyond the platform, we may or may not do it just to make sure that we are fully aligned with the partner. So a short answer is structurally, yes, but principally maybe not, right?
Parikshit Kandpal
This puts a lot of other lab between the growth and the management and as a partner whose interest is also to be taking care of an expectation of IRR again. So one side you have land prices which is going up. So you also have to share IRRs with your partner. So will that create further delays and the bureaucratic hurdles to pass through the muster to get the land deal because now the kind of business we are targeting an even if we do INR4,000 cores, INR5,000 crores of business development on the new land parcel that will require almost INR400 crores to INR500 crores of capital. So the quantum of capital going toward land is increasing when you have a partner again, and a lot of deals, which you do directly now it has to pass through the partner. So because now we have built a momentum in the last two, three years, somehow sensing little bit of discomfort at this momentum. I want reassurance from you that I mean the moment can continue and the structure and other things in our delay our target of like 10 times INR8,000 crores, INR10,000 crores of in the next three to five years. So that is where I’m coming from.
Amit Kumar Sinha
Yeah, yeah no it is [Phonetic] a point. And I think that’s why we’re choosing the right partner is very important too. I’m worried about the same thing. We typically call it operational freedom, operational independence. Obviously, there will be reserve matter, vehicle rights, etc. But there should be a principal meeting of minds and ways of working. So that we don’t see it under the bureaucratic hurdles when we have to move fast. You’ve seen in the past, we have closed deals in like two weeks’ time frame, right, situation where and then we are stuck because private equity partners, internal process and slow us down, right, that could not [Technical Issues]. So choosing — and that’s why right now, we have luckily a few options, and we will choose the right partner who will match our — from a strategic perspective, we are aligned, right? What we want to do, what we don’t want to do is very clear and they are aligned in terms of how we think, how we operate, how we’ll be creating value for each other.
And third is something that I care a lot about is about are we able to learn from them and bring more discipline our way of execution, right. In the end, this is a business of choices and then execution. Once you make those choices, you have to execute them very well. So that’s the part that I look forward to learning from my counterpart is going to be plain vanilla. I’ll just give you capital and I’ll keep asking a question. That may or may not work for us, and there are certain partners who can do that. I think we are looking for the right level of value creation from their side also, so that we both — we as an institution become stronger and better.
Parikshit Kandpal
Sir, just one more thing on that, the parent — how is the parent thinking about it? I mean there are two ways of doing it, either you directly do it at [Indecipherable]. So why is parent choosing to get a private equity partner here, when other companies or peers, I mean we are not seeing this kind of a structure, especially in a market which is doing so well. So — so how’s the parent thinking and whether this platform will be displaying running equity platform or it will be a structured kind of platform?
Amit Kumar Sinha
So short answer right now would be an equity platform, simple, right? We put 51, maybe they put 49, and we get — we share the return. So in a way, it’s pure equity platform. There is no like quasi debt or anything like that. It’s upside, downside, we shared in the ratio of our capital structure. I think at the group level, we’ve had multiple discussions, how we actually — how should we think about what we are seeing in the industry in terms of QIP and press, etc. Discussions are underway, but Mahindra as a group are very, very conservative about doing things. But it’s needed for us to — so the we have capital at the end, right? I think we will find capital to grow our business. And one way is getting still capital for defying our costs and then potentially at the right here, we’ll look at few IP preps at the right time. But that’s not something we are starting right now.
Parikshit Kandpal
Okay. But you have capital to contribute to this platform? Or will you require to do a fundraise at entity level through that, you see the capital into this platform?
Amit Kumar Sinha
Yeah, certainly. So as we keep evaluating and of course, the kind of deals that we’ll go through to this will be choosy as [Indecipherable]. [Speech Overlap]
Parikshit Kandpal
So it could be a multiclass partner bringing in the kind of equity and your contributing. So in fact, it can end up adding more?
Amit Kumar Sinha
Yeah, yeah exactly. Exactly. [Speech Overlap] And I think [Indecipherable] is a very important part that is tricky for us is many times, we have the cash like we have right now, INR600 crores cash sitting, which we can’t upstream efficiently, right. So and we can do a capital reduction, which is a painfully long exercise like NCLT [Phonetic], you do dividend with distribution, which is not tax and right. There are — there is a lot of cash sitting for us in different entities, which helps us in terms of bringing down our net debt-to-equity ratio, but we are just not able to deploy that cash. So that’s another consideration to keep in mind that it right now, so much cash is this — that we can’t use it just gives us flexibility but also an avenue to source capital in a more efficient way.
Parikshit Kandpal
Okay. So the last thing on this is as now we have future launch coming in. So how are you thinking beyond that? And what is the total funding land payments as of now?
Amit Kumar Sinha
How we are taking Vista Phase 2 is that? [Speech Overlap]
Parikshit Kandpal
No, no. So beyond that, so beyond that Vista will be done, so we need to look at the next set of land coming in from the parent company. So any thought there? And also, what is the total pending land payments to be done for all the land parcels, which we have acquired?
Amit Kumar Sinha
I think the total Kandivali that payment is done or there’s only TDR? Like how much is that?
Avinash Bapat
About INR100-odd crores.
Amit Kumar Sinha
INR100-odd crores is the commitment they have to close all the Kandivali Vista related payments, right? So that’s a short answer. I think…
Parikshit Kandpal
Pune, Bangalore. Pune, Bangalore how you are spending? And are they [Indecipherable] Pune.
Amit Kumar Sinha
Oh okay, okay. So Pune, I think Pune will have another probably yes, INR60 crores, INR70 crores, right, in the short term, then there is after three years, like it easy, we’ll have to make some payments — approval. And then everything else is back end when we get NOC and inclusive housing. So that’s that. Those are some of the big ones, right, Borivali [Phonetic] and this one, right?
Alembic was outright, we paid on that. Alembic is outright. [Indecipherable] is outright. The Sai Baba is in a low capital for us, which we’ll do in the time of NDA. So I think most of those payments are done from the previous land parcel, I think your question was how much is the land funding commitment that we have. So it’s only two of them, right?
And then from what will happen Kandivali, I think basically, that’s something we examine them to decisions, right? And they are they will decide based on their business priority, but also they have a factory and other things that is going on. So we can’t really comment on their decision. If that opportunity is made developable for us, we’ll look to find a way to work on that. That’s not a public open discussion at this time.
Parikshit Kandpal
Sure. Thanks for all the answer and wish you all the best. And happy Diwali to you.
Amit Kumar Sinha
Yeah, thank you, thank you. Same to you.
Operator
Thank you. The next question is from the line of Bharat Sheth from Quest Investments. Please go ahead.
Bharat Sheth
Hi sir. Thank you for the opportunity. Sir, we have spoken a lot on the other [Phonetic] financials. Sir, if you can give a little more color for the industrial side? And how are — and in your opening remarks, you said that we are some shortage of land as well as [Indecipherable] on the land. So would we buy back from the where the customer is not developing. So what rate do we buy back? And if you can give a little more color and we had a certain like the project in Gujarat and Maharashtra where we had some kind of a land. So when we like to launch a in the kind of opportunity industrial higher [Phonetic] happening?
Amit Kumar Sinha
So great question. I’m glad you raised that — let me give you a quick summary of the industrial business. And then I’ll come — and maybe let me answer the first question, how do we acquire the land back and then I’ll go into IC product, right? So we’ve done two of these already in a major way in the last 12 months. The one in Chennai, the other one in Jaipur. And — there are — when the lease offered to them, there were clearly two parts of the structure. One is whenever the land sells, there is a transfer fee that is charged by us as a marketer developer. So they have to pay that. So that’s a certain proportion, which is meaningful on this way. And the second one is the land would be acquired at either the original price or close to the close to a price that we agreed, right.
And then we have the option ability to actually mark in the line the way we want it, right. And both the cases, we have been able to create a very healthy spread by buying the land at the right price as well as generating the transfer income from both the lands that we have. So these are — these may not have the margins that you’ll get if you had the land acquired from day one, but these are, I would say, healthy margins for us. And since the price let’s say Chennai has gone up significantly because there’s practically no land available to us in the World City Chennai. The spread is very healthy, I would say, right, even though the purchase price is higher than the legacy purchasing price. So I just want to assure you that we are — these are all very sound economic decisions for us, and they are helping us improve our path to be honest. So that’s why we keep an account as we take any decisions on this kind. So that’s the first part.
Let me cover the IC business quickly, and I will not take too much time. But we have five plus one IC components in our portfolio. First is Mahindra World City, Chennai. 90% leased out. We have some land that will give us a healthy revenue for IC business, which we — which was bought back actually. Just the same example that we mean we de-notified that as line that we bought back. So that level healthy. We already have an LOI for that. Then that’s the first one.
The second one is OC1 and OC2, Origins Chennai 1 and Chennai 2. OCI is almost sold out, except one parcel that is start with litigation. And OC2 is something that we are planning to launch in the next three to six months. Sumitomo has been a partner with us in OC1 and they have shown interest to be a partner with us in Phase 2 that’s being renegotiated and closed their [Indecipherable] speed.
That also has a healthy potential of the order of 100 to 150 acres of land. OC2b is also there, which will take tackle after launching OC2a. So these are the twp in Chennai. The third and the largest opportunity we have in Jaipur Mahindra World City Jaipur. We have roughly 800 acres of land which is unleased a lot in the SEZ area. So we’re working with the government to see how we can convert that land into LTL, where we have demand, and we are sold out from our existing portfolio. We also have roughly 400 acres of land in our social infrastructure net area after all those one client. And the adjustments of efficiencies, roughly 27 acres. That’s for the Pink launch on the residential being plant. That’s significant potential for us, but it has had historical issues in terms of some taxation. We had just received a notice about that. We’re working very closely with the government to close that out. So that’s the third one.
And the fourth one is in Ahmadabad which is roughly 340 acres. We had tried to find an owner who would be interested in the entire 340 acres, but we got some inquiries, interest and all, but it has not fructified. So we have started now the business development effort for Origins Ahmadabad as felt by our leadership that drives our Jaipur. We feel that as there is significant momentum in the industrial sector, making sector, sooner or later, this land parcel will also find a good set of clients and we are ready to have a largest anchor plan to start this instead of selling it 340s to another developer, another industrial client. We want to develop now just like World City Chennai, Jaipur or origins. So that process has started for us.
And then finally, on this side, on Maharashtra, we have Origins Pune which is 60 kilometers from Pune, a very good location next to one of the MIDC industrial location, 60. A very good location I would say, from an industrial point of view and potentially for mix or residential as well. And that we got in some prior to one and everything has been done. Now we are finishing land aggregation access good to launch that at the earnest.
Those are the five and I said five plus one so the last part is the active joint venture that we have. We had committed INR200 crores that into that BTS plus warehousing, build-to-suit. We are [Indecipherable] have roughly 65% to 70% stake. We’ll have 30%, 35% stake. We’ve already moved forward with one target. Now one potential target. Now the second one is in the pipeline in Govandi. And that’s going to be an important one for us to build.
We are discussing at the Board level should we increase our capital commitment to that business because the shorter lead time, you can flip the asset and get it much higher returns from that. So those are the five plus one businesses that we have in industrial. If you look at overall potential that we have, we believe that this business over the next 10 years has a potential for roughly INR2,000 crores of PAT. So I just wanted to be INR2,000 crores of PAT potential that IC businesses has in the next 10 years. It has also served us well in the past, but it has been able to serve us better in the future. And that’s something that we are consciously bringing the team, building the portfolio so that we continue to — ourselves as a strong high [Phonetic], which has a pan-India presence with the right set of government and private partners. And that business is becoming more than important for us. We will Mahindra brand can offer multiple other products and services like sustained, logistics, other things. So that’s a very good business that we are investing behind in a smart word.
Bharat Sheth
Sir, I have two questions on [Indecipherable] with Jaipur and converting from the SEZ to DPA and we are working since more than five years. So what has really preventing? That is one. And second, when you are talking of INR2,000 crores kind of a set is it our side or it is up for joint venture.
Amit Kumar Sinha
Short answer on both. This our side is INR2,000 crores after adjusting for minority interests, right? So that’s 2,000. But this is lumpy and all, and we have to bring that to bear. So that’s something that you should know. At least I want to give you a top-down view. And then SEZ to DPA [Phonetic], you’re right. I think in Jaipur, see in Chennai, it’s been much faster. For some reason, Jaipur has its own set of delay challenges, but we’re working through it. Each state has its own machinery and the system. We have to respect how they work and convince them that it’s the right thing for them as well as for the rest of the shareholders and the stakeholders.
Bharat Sheth
What is the land parcel that we are looking for SEZ to DPA [Phonetic]?
Amit Kumar Sinha
What is it, sorry?
Bharat Sheth
Size of the land parcels for which we are working SEZ to DPA.
Amit Kumar Sinha
It’s roughly 500 acres in the size of the land that we can, but not all can be convert into DPA because there are some constraints physically with the existing SEZ infrastructure. So between 400 to 500, yeah.
Bharat Sheth
Thank you. Thanks, and all the best.
Operator
Thank you, sir. Sir, can we take one more last question?
Amit Kumar Sinha
Sure, sure go ahead.
Operator
We’ll take the next question from the line of Ronald Siyoni from Sharekhan Limited. Please go ahead.
Ronald Siyoni
Thank you, sir. Thank you for the opportunity and congratulations on good performance. On the equity platform, sir, I wanted to know if you are looking for any kind of size in the equity platform one? And second one is that in the target here because as you said, the affordable has not been picking up as we would have expected. And super luxury has been doing very well, if you say it in MMR or NCR. So would we still stick to mid-segment or we can expect some super luxury kind of projects also? And what will be the size of the overall equity platform?
Amit Kumar Sinha
So yeah, thanks, Ron. Good question. I think the equity platform, we are thinking it to be at least INR1,000 crores to INR1,500 crores by each partner. So INR2,000 to INR3,000 crores is the size of the overall platform, 50% from us, 50% from the partner. So that’s what — anything less becomes betting [Phonetic] for scaler. So that’s what we are thinking about.
And the second question was the — [Speech Overlap] yeah the segments. Segment focus was your thinking in the past calls have clearly said we will not pursue affordable anymore. So that segment is out. And while super luxury and all are very exciting. Our focus is going to mill premium and premium. And the way we segment the market is affordable, mid-premium, premium and luxury, right? So we’ll play in the middle two segments. We’ll not play in the too extreme segments. And I think if we have a track record of doing premium projects and some of the premium projects if they are an expensive, they will automatically become luxury. So if you do, let’s say, what we are doing at Luminare, Luminare is like INR7 crores, INR8 crores, it is a very nice project with balconies and all those things. You put that in South Bombay, that INR7 crores become INR37 crores, like automatically.
So we have the ability to make premium products, but we don’t want to go into luxury in a big way. We’ll continue to develop a track record built capabilities for mid-premium and premium. Once we have that, then we say that, hey, if you want to go to most — more expensive neighborhoods where the ticket size goes north of INR15, INR25 crores then we maybe we’ll look at it. But right now, our sweet spot is we want to make some of the best homes, which are in the budget of, let’s say, INR2 to INR7 crores to right, which is what is the market opportunity that can be taken up seriously.
Ronald Siyoni
Okay. Excuse me. Just one suggestion. Your focus would be mid-premium and premium but just one project of super luxury gives a lot more brand value to the company itself. So just a suggestion. And even if we don’t focus on project, the landmark project, would you give a great brand value for the company.
Amit Kumar Sinha
Not absolutely [Technical Issues] we will sign [Technical Issues].
Ronald Siyoni
Best of luck sir. Thank you very much.
Operator
Thank you. Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference over to Mr. Amit Sinha or Kumar Sinha, for MD and CEO, for closing comments. Over to you.
Amit Kumar Sinha
No, thank you, good discussion. To be honest, I feel that there is a lot more momentum in the market than what the quarter two sales numbers reflect it. And that’s an area that will hopefully be — you’ll see more action in the quarter three, quarter four. But overall, we are making good progress in the right direction. Lumpy business, you always have ups and downs and delays by a quarter or a few days, but we are building a strong set of capabilities for us to manage the ups and downs of the business in a less noisy way. So you’ll see more action, more excitement from us in the coming days.
We also changed the investor presentation a little bit for you to get a good view of where our inventory is, what’s the opportunity. So take a look if you have all questions, let us know. Happy to answer them in an offline meeting.
Operator
[Operator Closing Remarks]