MOSL: L&T FINANCE HOLDINGS (GROUND REALITY)-Assessing the NCR real estate market
L&T FINANCE HOLDINGS (GROUND REALITY): Assessing the NCR real estate market; End-consumer demand stable; Inventory overhang steadily declining
L&T Finance Holdings (LTFH) organized an analyst visit to Noida with special focus on the key projects of Supertech that the former has funded. We visited two of the three projects funded by LTFH.
Key takeaways:
- Over the past four quarters, there has been a meaningful reduction in inventory overhang for mass housing projects. For example, inventory overhang for 1-2BHKs has reduced from the peak of 68 months to 60 months. Similarly, for 3BHKs, it has reduced from 56 months to 42 months. Overall, the overhang has reduced from a peak of 71 months to 49 months now.
- Overall, LTFH has funded four builders and seven projects in Noida. It has avoided early stage funding in this region; all of LTFH’s funding is backing mid-stage and late-stage projects. Supertech is one of LTFH’s largest exposures in Noida, totaling INR8b across three projects (largely equal among the three). In all cases, LTFH is the sole lender to the project. Note: No pre-approval funding is done in NCR.
- The first project we visited was Supertech Capetown, a mixed-use development comprising commercial and residential spaces. The 66-storey tower, when completed, will be one of the largest in Noida. The second project is Supertech Eco-Village 1, a large mid-market affordable project (INR3-3.5k/sqft) in an advanced stage of completion.
- In addition to its regular in-house monitoring, LTFH has also appointed a ‘Big 4’ firm six months ago for sales, commercial and technical audit, specifically for all the three Supertech projects. This firm submits a comprehensive report to LTFH on a monthly basis.
L&T Finance Holdings Limited is a non-banking financial institution-core investment company. The Company's segments include Retail and Mid Market Finance, which consists of rural products finance, personal vehicle finance, microfinance, housing finance, commercial vehicle finance, construction equipment finance, loans and leases and loan against shares; Wholesale Finance, which consists of project finance and non-project corporate finance to infra and non-infra segments across power-thermal and renewable; transportation-roads, ports and airports; telecom, and other non-infra segments; Investment Management, which consists of assets management of mutual fund and private equity fund, and Other Business, which consists of wealth management and financial product distribution. It offers a range of financial products and services across retail, corporate, housing and infrastructure finance sectors, as well as mutual fund products and investment management services.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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