The Shapoor Mistry-run Shapoorji Pallonji Group, one of India’s largest and oldest construction companies, has roped in the Asian Development Bank (ADB), International Finance Corp (IFC) and Standard Chartered Private Equity to set up a company that will build affordable housing in India.
Shapoorji Pallonji & Co, which is also the largest shareholder in Tata Sons, will form a $250-million company with equal equity stakes from all four shareholders, and house the Joyville brand.
Affordable houses with a ticket size of Rs 25-50 lakh is a growing segment, which has been attracting young investors. Around 20,000 affordable residential housing units are likely to be built.
“We looking to develop 20 million square feet in the first phase. The estimated cost is likely to be `6,000 crore with a revenue potential of about Rs 10,000 crore,” said Venkatesh Gopalkrishnan, business head, Joyville.
The first project will be launched in Howrah this week followed by another in Virar in the Mumbai suburbs by March-end. The plan is to launch 8-10 projects in cities such as Mumbai, Pune, NCR, Chennai, Kolkata, Bengaluru and Ahmedabad in the next 6-7 years.
The Pune-based Shapoorji Pallonji was founded by Pallonji Mistry, who was recently awarded the Padma Bhushan for his contribution as an industrialist in developing India.
Several other real estate majors, including Tata Housing and Mahindra Lifespace Developers, are other players in the affordable housing segment. The government has set a target of providing housing for all by 2022, which will require about $2 trillion worth of investments according to analysts.
Shapoorji Pallonji will only launch a project once all the approvals are in place to ensure timely delivery, said Jai Mavani, executive director at Shapoorji Pallonji.