One Hinjewadi Developers Pvt. Ltd.

Transcription

1 The best investment on earth is Earth! One Hinjewadi Developers Pvt. Ltd. Information Memorandum 2014

2 Table of Contents Topic Page Overview of the Opportunity 3 Overview of the Land 5 Capital Structure and Minimum Investment Size 9 Illustrative Investor Returns 12 FAQ s 23 2

3 Executive Summary Overview of Opportunity

4 Overview of the Opportunity Transaction 87, Sqft.of land parcel at Hinjewadi, Pune ( Land ) has been acquired in Pune Premises. It is a partnership firm owned by Atul M. Lunkad and Sanjay M. Palesha. Land proposed to be transferred vide Regd. Development Agreement under a Special Purpose Vehicle One Hinjewadi Developers Pvt. Ltd.. Investors to subscribe to a preference share and Debentures in the SPV. Business Model of the SPV The SPV shall acquire the land vide Regd. Development Agreement from Pune Premises.. It will hold the land for 7 Years from the date of entering into Regd. Development agreement. After a period of 7 Years the company will have 4 options i.e :- i) Sell the Land at prevailing market value ii) Enter into Joint Venture Agreement with Third Party (Developer); iii) Develop the Plot by the SPV iv) TDR (in case of reservation on the land) Investment Amount Investment amount is Rs. 2,50,540 Lacs equivalent to Sq. Ft of Land Area INR. 1000/- Preference Share and INR. 2,50,540 Lacs as Debentures (Advance/ Deposit to ensure tax efficient profit extraction) 0.57% ownership in the Company. Growth Potential and Returns Significant appreciation in land price expected over the coming years in the Western Corridor of Pune An investment of INR 2,25,486 Lacs for 0.57 % in preference to potentially yield an investment multiple of ~ 4x over a 7 year period The SPV has the option to repay its Debentures facilitating an exit for the investors. 4

5 Overview of the Land

6 Land Details and Attributes Land area Location Business Model About Hinjewadi 87, sqft Hinjewadi, Pune Western Corridor Land & Equity Hinjewadiofficially is a locality now treated as the IT Village of Pune which is located on the NH4 bypass around the city of Pune. Originally a small village, it is now the location ofrajiv Gandhi InfoTechPark, housing around twohundredsoftware companies Proximity to The technology park at Hinjawadihouses many software companies. Some of them are:emerson Innovation Center Pune,Fulcrum Industrial hubs Worldwide, IBM India, HexawareTechnologies,AtoS,SynechronTechnologies, Mahindra Engineering (located at the remotest corner of phase 2),Idea Cellular,KPIT Cummins,Tata Technologies,Infosys,Wipro,Credit Suisse(located inside Wipro),Tata Consultancy Services,Geometric Limited,Tech Mahindra,CognizantTechnology Solutions,Persistent Systems, Honeywell, Mindtree, 3DPLM Software Solutions, CECsoft, Compulink, Pesh-Infotech,ANSYSFluent and Digital Group InfoTech. It also houses product companies such as Compulink and CISCO. Nearby Townships developments The influx of IT professionals to the Rajiv Gandhi InfoTech Park is causing a rapid growth of townships in Hinjawadi. This has led to the development of integrated townships in Hinjewadi, which have schools, health care facilities, restaurants, shopping areas and entertainment areas on their premises. Most of the developers in Pune are developing integrated townships in Hinjawadi. Some of these townships include Megapolis Pune by Pegasus Properties Ltd, Life Republic by Kolte Patil Developers, Blue Ridge by Paranjape Schemes (Construction) Limited and Xrbia by Eiffel Group. Rapidly growing Education hub Two major colleges are also located in Hinjewadi namelyinternational Institute of Information Techonologyand Symbiosis Centre for Management and Human Resource Development. These two are located in Phase 1 of the Area. Sharad Pawar international school in Megapolis Township. 6

7 Land Location and Connectivity 7

8 Capital Structure & Investment Size

9 Capital Structure of the SPV Promoters Investors 25 % Preference Share Holders 75% Preference Share Holders SPV 100% Land parcel 9

10 Investment Size 1 Unit of Investment is equivalent to sqft. of land area and 0.57% ownership in the SPV Investment Investment towards: (% of Contribution of Total Capital Raise) Amt. In. Rs. (Rate / Sq ft of total land area per unit of investment i.e sqft.) - Cost of 1 Preference Share - Cost of 1 Unit (Land) 1000/- - 2,25,487/- Rs. 450/- - Development 25,054/- Rs.50/- Expenses TDS (Collected Today) 18,941/- --- Total 2,70,482/- Rs 500/- Minimum Investment Number Values (Rs) - Through Preference Shares - Through Secured Debentures 1 Rs 1000/- - Rs. 2,50,541/- Total Rs 2,51,541/- 10

11 Illustrative Investor Returns

12 Assumptions and Product Mix 1. Project Duration - Option I (Sell the land) - 7 Years - Option II (Joint Venture with Third Party) 7 Years + 4 Years = 11 Years - Option III (Company itself Develops the Plot) 7 Years + 4 Years = 11 Years 2. The incoming investors will be issued preference shares of Rs. 1000/- each for each unit of investment. 3. Each Investors investment will be linked for arithmetical understanding to an area of Sq. Rs. 450/- per sq. ft. i.e. Rs.2,25,487/- 4. Investor will have to pay Rs. 50/- per sq. ft. towards development expense i.e. Rs.25,054/- 5. Every Investor will have to pay TDS amount Rs. 18,941 in advance on the date of investment as a part of investment itself. 6. The balance investment will come into the company in the form of Debentures. 7. Debentures will be entitled to an 12% p.a. 8. Interest, will be accumulated every year and corresponding TDS (Tax Deducted at Source) will be credited to the investor (Tax Credit). 9. Investor can exit from the Investment Option at any time and get 12% p.a. interest. Investor will transfer his shares to promoters, if he desires to exit. 10. Investor will get accumulated interest on Debentures and profits (after taxes) will be distributed in the form of dividend, which will be a tax free income at the end of the project. 12

13 Assumptions and Product Mix 1. Income Tax 33.99% 2. Dividend Distribution 17.65% 3. TDS on investment collected today does not form part of the cost of investment as the credit of the same can be claimed by the investor. 4. In case of a reservation on land of any kind, TDR is issued against it. Currently the TDR cost in the market rates are as below Zone A Rs / Sqft Zone B Rs / Sqft Zone C Rs / Sqft Zone D Rs / Sqft The returns for the same have been shown in the presentation ahead. 13

14 Facts & Assumptions : 1. Total Area of land = 87, Sqft. 2. Sale Rate of Land is Rs. 3000/Sqft. 3. Project Duration : 7 Years Option 1 : Sale of Land

15 Option 1 : (Option 1 for Investor) RETURN ON INVESTMENT TO INVESTORS SR NO PARTICULARS AMOUNT IN RS. A AREA IN SQ. FT B COST OF INVESTMENT PER SQ. FT 450 C COST OF INVESTMENT (A*B) 2,25,487 D DEVELOPMENT EXPENSE PER SQ. FT 50 E COST OF DEVELOPMENT (A*D) 25,054 F TDS ON INVESTMENT COLLECTED TODAY 18,941 G TOTAL COST OF INVESTMENT (C+E) 2,50,541 H INTEREST ON DEBENTURES RECEIVED FOR 7 YEARS 1,89,409 I DIVIDEND ON INVESTMENT 6,36,908 J TOTAL RETURN ON INVESTMENT (H+I) 8,26,317 K INVESTMENT VALUE AT THE END OF 7 TH YEAR (G+J) 10,76,858 L INVESTMENT MULTIPLIER (K/G) 4.00 M % RETURN P.A. [(J/G)/7] 47.12% 15

16 Facts & Assumptions : 1. Total Area of land 87, Sqft. 2. Joint Venture considered in Ratio 35% (Land Owners) : 65% (Developer) 3. Total Saleable Area Sqft. 4. Sale Rate of Flat is Rs. 7000/Sqft. 5. Project Duration : Years Years Option 2 : Joint Venture

17 Option 2 : (Option 2 for Investor) SR NO PARTICULARS AMOUNT IN RS. A AREA IN SQ. FT B COST OF INVESTMENT PER SQ. FT 450 C COST OF INVESTMENT (A*B) 2,25,487 D DEVELOPMENT EXPENSE PER SQ. FT 50 E COST OF DEVELOPMENT (A*D) 25,054 F TDS ON INVESTMENT COLLECTED TODAY 18,941 G TOTAL COST OF INVESTMENT (C+E) 2,50,541 H INTEREST ON DEBENTURES RECD. FOR 7 YEARS 1,89,409 I DIVIDEND ON INVESTMENT 10,02,908 J TOTAL RETURN ON INVESTMENT (H+I) 11,92,318 K INVESTMENT VALUE AT THE END OF 11th YEAR (G+J) 14,42,859 L INVESTMENT MULTIPLIER 5.76 M % RETURN P.A. [(J/G)/11] 43% 17

18 Facts & Assumptions : 1. Total Area of land 87, Sqft. 2. Total Saleable Area Sqft. 3. Sale Rate of Flat is Rs. 7000/Sqft. 4. Construction Cost considered as Rs. 2500/- Sqft. 5. Project Loan is considered for Rs % p.a. 6. Project Duration : Years Years Option 3 : Self Development (7 + 4 Years)

19 Option 3 : Option 3 for Investor SR NO PARTICULARS AMOUNT IN RS. A AREA IN SQ. FT B COST OF INVESTMENT PER SQ. FT 450 C COST OF INVESTMENT (A*B) 2,25,487 D DEVELOPMENT EXPENSE PER SQ. FT 50 E COST OF DEVELOPMENT (A*D) 25,054 F TDS ON INVESTMENT COLLECTED TODAY 18,941 G TOTAL COST OF INVESTMENT (C+E) 2,50,541 H INTEREST ON DEBENTURES RECEIVED FOR 7 YEARS 1,89,408 I DIVIDEND ON INVESTMENT 18,79,451 J TOTAL RETURN ON INVESTMENT (H+I) 20,68,860 K INVESTMENT VALUE AT THE END OF 11th YEAR (G+J) 23,19,401 L INVESTMENT MULTIPLIER 9.26 M % RETURN P.A. [(J/G)/11] 75% 19

20 Investor Return Sr. No. Particulars SALE OF LAND 35% DEVELOP SALE OF TDR A Cost of Investment Bi Interest on Investment Bii Dividend on Investment Total Returns C Investment Value D % Returns per annum 47% 43% 75% 39% E Investment Multiplier (times)

21 DIFFERENT MODES OF INVESTMENT AND RETURNS PARTICULARS Bank Sector- FD PPF GovtBonds Mutual Funds Shares ELSS Real Estate (Plots& flats ) Gold Cost of Investment No no of years Rate of Return 8%-10% 8%-10% 6%-8% 15%-18% 15%-18% 15%-18% 24%-46% 18%-20% Return at mean rate Interest Compounded qtrly (except shares,mutual fund,real estate and gold)

22 Frequently Asked Questions

23 Land FAQ s 1. What is the location of the land? Land is located at 3 mins. away from Phase 3 in Hinjewadi, Pune. 2. In whose name is the 7/12 Extract on? The land is currently on the name of M/S Pune Premises 3.Then why are the cheques being taken in the name of One Hinjewadi Developers Pvt. Ltd.? There has been a development agreement between Pune Premises & One HinjewadiDevelopers Pvt. Ltd. Thus transferring all the development rights in the name ofone Hinjewadi Developers Pvt. Ltd. Thus now the land is being held under this SPV 4.What is the status of the land? The land currently is in Proposed Residential zone. 5.What is the existing plot rate in Hinjewadi? Currently agricultural land rates in Hinjewadi is from Rs /Sqft. 6. Is the title of the property clear? Yes the title of the property is a 100% clear. You will get to see all the supporting documents at our office. If required, acdwith our legal documents will be provided by our Sales representative. 7. Who will service the land for the next 7 years? The company will service the land for the next 7 years. 23

24 FAQ s 1. As an investor, after 7 years what is the best option for me? As an investor the highest returns will be in the following order : A. The company itself develops the land B. Sell of the Land C. Give the land in JV 2. Why cannot I put all my money as preference share and divide it between preference & loan? Company has framed such a policy considering all the preference shareholders and taxation both in the hands of the company and investor. From Company s point of view i) Interest can be claimed as expenditure ii) Tax on Interest saved. From Investors point of view-i) Every year some amount of income is getting accrued of which taxation benefit can be claimed by the investor. ii) At the end of the 7 th year tax burden will be less. dividend income received by the investor will be tax free. 3. If want to opt out of the scheme before the 7 year term, who will buy my shares? The investor has the option to exit from the scheme at any given point of time with ROI of 12% Simple interest. 4. What is my security against the investment Scheme? Every Investor investing in our scheme will get a Preference Share Certificate & Share holders Agreement. 5. Are there any additional charges for documentation? No, there are no additional charges for documentation. 6. Why is the TDS amount collected from me today itself? As there would be on transaction in the company for 7 years there would be no funds in the company s accounts, therefore investors being the only source of TDS, the same is collected in advance rather than every year. The credit of which can be taken by the investor. 24

25 FAQ s 7. Can NRI s invest in this investment scheme? No NRI s are not eligible for investing in this investment scheme. 8. Who will be deciding the valuation of the land after 7 years The company will have the land valuated from top real estate companies like JLL, CBRE & Knight Frank. 9. What are the facilities being provided for which Rs. 50/Sqft is being charged? Rs. 50/Sqft. Is being charged for the following purposes A. Fencing / Compound Wall F. Waterline / Drip Irrigation B. Leveling G. Landscaping & Tree Plantation C. Demarcation H. Electric Meter D. Internal Roads I. Security E. Staff / Admin Expenses J. Liasoning 10. Key distances from our plot: Phase 3 3 mins Phase 2 7 mins Phase 1 10 mins Pirangut 15 mins Hotel Lemon Tree 10 mins Pune Mumbai Highway 15 mins Symbiosis Infotech Campus 10 mins Balewadi Stadium 20 mins 25

26 Disclaimer This presentation does not constitute offer to the Public to subscribe to the Securities of the Company. This Investor Presentation has been prepared for investors, solely for informational purposes. The information contained herein has been prepared to assist prospective investors in making their own evaluation of the Company and does not purport to be all-inclusive or to contain all of the information a prospective or existing investor may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company and the Transaction and the data set forth in this information. We make no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) regarding information contained in, or for any omissions from, this information or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Transaction. The Investments is only suitable for sophisticated investors who are able to bear the risk and who have sought professional advice concerning the possible tax consequences, legal requirements relevant to the investment and relevant generally to the making of investments in such projects. This Information includes certain statements and estimates provided by the Company with respect to the projected future performance of the Company. Such statements, estimates and projections reflect various assumptions by promoters concerning possible anticipated results, which assumptions may or may not be correct. No representations are made as to the accuracy of such statements, estimates or projections. Prospective investors will be expected to have conducted their own due diligence investigation regarding these and all other matters pertinent to investment in the Company. 26