Sunteck Realty: Separate the men from the boys

Sunteck Realty is a Mumbai focussed real estate developer, catering to the ultra-luxury and luxury residential segment.

Sunteck has about 23 million square feet spread across 25 projects at various stages of development and 4 rented assets. Sunteck has completed 6 projects of about 2 mn sq. feet within 4 years.

“90% of builders in realty dying as they can’t cope with RERA,” Khushru Jijina, Piramal Finance.

Competitive Advantage:
– Mumbai focused developer
– Strong balance sheet & asset light model
– Strong land acquisition track-record in the post-Lehmann crisis years
– Projects with major capital allocation in BKC & ODC, Goregaon
– Differentiated branding helps command premium positioning
– Association with renowned partners such as Kotak Real Estate Fund and Ajay Piramal Group

Customers:
BKC attracted prominent buyers such as banker Uday Kotak, actress Aishwarya Rai, former Citibank head Vikram Pandit, and former Deutsche Bank executive Gunit Chadha.

Opportunity:
– Exit of unorganised deveopers and consolidation in the market

Management:
– Mr. Kamal Khetan has over 2 decades of experience in Real Estate industry
– Bet on undervalued pockets of land in a tough market
– Proven ability to predict growth areas ahead of the curve
– Acquisitions done during peak recession
– Ability to create strong long term partnerships with renowned partners

Investors:
– Promoters hold 67% of the company
– Pabrai Funds hold 8.3% of the company
– Ajay Piramal holds 2.7% of the company

– Kotak Realty Fund is one of the major institutional share holder in the company with a board seat
– Sunteck is developing several projects in partnership with Ajay Piramal Group
– PE funds help in land acquisition

– In Oct 2017, Fidelity Funds bought 7 lakh shares of the company for ₹22.5 crore, or at ₹322 per share
– Sunteck Realty raised over ₹650 crore from global financial institutions through QIP and promoter’s capital infusion

Videos:
GST, RERA to benefit organised players:

3 opportunities where Sunteck Realty is betting on:

Sunteck Realty raises ₹650 crore via QIP:

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