The $2.5-billion Godrej group plans to make its property development arm Godrej Properties (GPL) the largest business within the group in 5-10 years. “This is the fastest growing and capital intensive business and does not entail competitive pressures as other businesses have. In turn, most of this company’s growth will be from the affordable housing segment,” group chairman Adi Godrej said.

Godrej Properties will be raising Rs 500-1000 crore within two years through a qualified institutional placement. “The promoter holding in the company is around 83%. We can dilute up to 10% equity to raise money depending on project requirements,” he said. The company, which has a debt-equity ratio of 0.6:1, had raised around Rs 550 crore in January through its initial public offering.

The company has lined up residential and commercial projects in Ahmedabad, Bangalore, Mumbai, Hyderabad, Chandigarh and Kolkata. In Hyderabad, it will develop 7.5 million sq ft in the outskirts of Moosapet and Patencheru, targeting the affordable housing and the retail segments. It is currently developing properties of around 90 million sq ft across 25-30 projects. GPL is also developing residential property of around 15 million sq ft. “Affordable segment, what we define is an apartment costing less than Rs 25 lakh, has better growth propositions as it is easily accessible to the larger parts of population,” he said.

The group is also looking at inorganic growth options in the FMCG segment and may acquire companies in the haircare and household insecticides segment, which contribute to a chunk of the FMCG business. Recently it had acquired a household product company in Indonesia, a soap company in Nigeria and haircare company in South America. “Our first choice would be India. However we are open to buyouts internationally too,” Godrej said.

He further added that interestingly, the per capita sales in Indonesia, Argentina and South Africa is higher than in India. On the other hand, the group hopes to chart a 25-30% growth, of which organic growth would contribute 15-20% and the rest from the inorganic route. “While we haven’t earmarked any funds, we would use funds in the cash reserves and then go for debt or equity,” he said.

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