Godrej Properties To Use Rs 6,000-Crore Fundraise To Boost Growth, Not To Drive Sales

Godrej Properties Ltd. plans to utilise the recently approved Rs 6,000 crore fundraise to drive growth by increasing capital investment.

The realty firm is not looking forward to deploying the funds for sales growth, according to Managing Director and Chief Executive Officer Gaurav Pandey.

Earlier this month, the Godrej Properties’ board had approved raising up to Rs 6,000 crore by issuing securities.

Speaking to NDTV Profit, Pandey asserted that the company has enough capital to sustain its sales growth for the third and fourth quarters.

“The capital raise has got nothing to do with our performance on the sales side. In fact, we have enough and more to sustain reasonable growth,” Pandey said.

The property developer has posted stellar growth for the July-September quarter. Its net profit has risen over four times year-on-year to Rs 333.8 crore. The company had reported a Rs 72.6 crore profit for the similar period in the year-ago period.

Pandey said that Godrej Properties was going through an "explosive" growth phase. “If you see Godrej Properties, it grew about 56% between FY22 and FY23 and in FY23–24, we grew by 84%. In H1, we have grown by around 90%. This is by any standards one of the most explosive growths we have seen,” he said.

“We are seeing launches and performance far higher than what we had both underwritten and expected,” the CEO added.

Pandey explained that the whole of Rs 6,000 crore raised will be purely used as a growth capital and not to increase sales performance.

“To maintain and capitalise on the market opportunity, we want to look at this purely as growth capital... Frankly, for the next 12–18 months, we have enough and more to deliver on great growth,” he said.

The top executive noted that the H1 performance was the best ever for the company, adding that Q3 and Q4 also look strong. “We have a series of big bang launches planned in most markets where we operate, including both Q3 and Q4,” he said.

However, Pandey was not too excited about raising the guidance even though Godrej Properties has already achieved 51% of its booking value guidance.

“We’re doing some internal analytics and realise that we typically achieve 37% of our guidance in H1 as compared to H2., and the best ever H1 has been typically 40%. This time, it has been like 50% to guidance. We have a very high upside risk, but we want to maintain the same guidance,” he said

Shares of Godrej Properties closed 0.99% lower at Rs 2,935 apiece on the NSE as compared to the benchmark Nifty 50’s dip of 0.15%.