Mehul Nisar-CFO, Rodium Realty

What are the reasons for the good financial performance of the last fiscal year?
Rodium Properties was one of our companies and we were looking to grow and expand our reach and therefore decided to take the IPO route. During the process we got an opportunity to buy the promoter’s stake in one of the already listed companies called Vishal Cotspin registered in Banglore. We did this through an open offer and took over the company after which we carried out a merger with Rodium Properties. But if you want to know specifically what helped us give better results and perform better, it was aggressive sales. We believe that there is risk involved in holding any property since it might or might not sell.

We prefer selling out early and get the ball rolling so as to earn maximum profitability for our investors and start on a new project. I am not a land owner or developer. Therefore, it is financially viable for me to sell early. We are Kachhi Jains and we are groomed to be very conservative so that we always keep the interest cost in our mind. Another thing that has helped us is that over a period of time we have invested lot of time in client servicing. That helps to get repetitive orders. Moreover, we have low operating costs. A few years ago the company was totally debt-free and whatever debt we have at this point of time comprises of over 90 per cent from the promoters.

Looking at your exposure and experience, would you also be venturing into project consultancy or project management?
As a matter of fact, we have already started a project management consultancy (PMC) unit two years ago and have some good clients on the roster. This took shape out of the realisation that there are many investors and real estate groups who do not possess the expertise of buying property and especially ensuring that it is free of litigation and has all the relevant clearances. We have taken advantage of this scope for both horizontal and vertical integration.

What kind of financial road map have you prepared for this year?
On a conservative basis, we are expecting growth of 75-90 per cent. We are very confident of our sales strategy. This year will be a challenging one for most of the players because of the new laws and schemes introduced by the government, rising commodity prices, spiralling interest rates, etc. However, we are confident of doing well. 

Could you elaborate about your ongoing and future projects?
We have a total of four projects, two of which are ongoing. One is in Juhu which is a premium residential building and the second is a commercial complex coming up in Andheri. The next two projects will be in Kandivali and Matunga which will be started as soon as the formalities are completed. With our objective of expanding our operations, we are looking at specific pockets where sales are very fast and where price volatility is not too dependent on economic boom or bust. These pockets are Dadar, Matunga, Mahim, Vile Parle, Wadala, etc where the supply exceeds the demand. Likewise, we see the need to enter into places like Lonavala which is the closest holiday destination for Mumbaikars. We are trying to build properties that can be maintained internally. We are also looking at Ahmedabad. As of now it very expensive but we may come across the right kind of land for development. Another region is Baroda which has been ignored by many because of its tag of being an industrial city. Cities like Hyderabad and Bangalore are on our radar too.

How is technology helping you to command better margins?
It is helping us big time, not in terms of commanding better margins but for providing good service to our customers. Investing in mere technology is not the same as investing in sustainable processes such as rainwater harvesting or water filtration plants because these are the need of the hour and will help the customers in the long run.

Any plans for diversification into different verticals such as infrastructure, maintenance projects, etc?
We are not looking at immediate diversification. There are plans but they will require some deep study before we venture into something new. One of the ideas that we have been contemplating on is to start theme hotels. For example, tourists coming to India for medical treatment would be able to avail of it in their hotel rooms instead of having to go to various places. It’s just as an idea and we are working on how to develop it.

What are the risks and challenges that you forsee in this sector?
In our country everything you undertake is a risk or a challenge and that is what makes us the best entrepreneurs in the world. Some of the specific challenges are the rising inflation rate, cost of raw materials, lack of regulatory clarity, decreasing availability of land, etc. The basic idea is to execute projects in such a way as to keep them financially viable. India is growing rapidly and so there will be opportunities galore but these have to be approached with caution because we don’t want our investors to suffer any losses.

How is your sales approach different from the others?
A good sales strategy is based on the company’s ability to develop a trustworthy relationship with the client. We prefer honesty and integrity when dealing with our clients. We explain to the buyer every aspect of the property that he or she is purchasing. This has stood us in good stead and we have had many clients who have time and again preferred us to the other companies.

Why did you choose Rodium as the company’s name and why are all your projects named with the X alphabet?
It just so happened that when we were trying to find a name for our first project, the alphabet X came across very strongly and we felt that it had an infinite potential and power to grow. As for Rodium, it’s a Spanish word for the element Radium, a catalyst that makes anything happen.

What is your vision for the company?
The short-term plan is to make the foundation of the company very strong. I want to make sure that the company treads on the right path. As soon as a company goes from a partnership firm to a public listed company, the management’s accountability towards the stakeholders increases manifold. Therefore, our focus is on expanding into other profitable areas. Over the years we will get into concept-based business. Today people do not buy only property. Their property must define their lifestyle too. Therefore I see Rodium gradually providing all sorts of services to real estate companies.

Is there a plan to start a B-school to be able to share your experience and provide specialisation in the realty sector?
We may do so but the timing has to be right.