Vas Animation(Infrastructure) Ltd.

Vas Infrastructure ltd.

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The company earlier known as Vas Animation Ltd. was set up in 1997.The company was not doing any business over the last few years. In April’06 the company has announced the change in name to Vas Infrastructure Ltd. In line with the change in name the company is now pursuing business in development of real estate. It is already doing housing projects in Borivali and Goregaon in western suburbs of Mumbai and also commercial property development in Malad.

Over the next two years the company hopes to get aggressive in development of real estate and more so in construction of luxurious flats/commercial property in the suburbs.

Borivali project:

The company has purchased a plot of 125000 sq.ft. land from the promoters for a consideration of Rs190 mln. The plot already has some buildings on it. As per existing development rules the company can construct about 28000 sq ft. However the company has already purchased about 12000 sq ft of TDR and hopes to purchase another 0.5 mln. sq ft of TDR at Rs1400-1500 per sq ft. This together with purchase of about 0.4 mln. sq ft of TDR rights at an average cost of Rs1000/sq ft will entail it to construct about 0.425mln lac sq ft of carpet area in the form of 3 towers over the next 3 years. The company has already contracted with the neighbouring Societies to purchase the TDR rights of 0.5 mln. sq ft at an average rate Rs.500-700per sq ft.

The carpet area of 0.425 mln. sq ft will enable it to sell about 0.720 mln. sq.ft of built up area at an average rate of Rs4500/sq.ft.

The first tower is likely to be completed by Mar’08, the second tower by Mar’09 and the third tower by Mar.’10.

The construction cost will be Rs2300/sq ft and the profit on 0.720 mln. sq ft of saleable area will result in a profit of Rs1600 mln in 3 years time. The profit for ’07 is likely to be Rs110 mln, Rs750 mln in’08 and Rs725 mln in ’09 from this project.

Goregaon

The project in Goregaon entails construction of 4 towers of 20 floors each. The project however necessitates the rehabilitation of the existing slums. This requires rehabilitation and construction of tenements for these dwellers. On completion of this the company would be entitled to use the available 0.860 mln. sq ft. of carpet area or 1.127 mln.sq. ft. of carpet area.

Being a SRA project(Slum Rehabilitation ) the project does not involve any purchase of TDR’s or TDR rights.

At the moment no cost has been finalised for payment to the owners of the land for transferring the development rights. But in our estimate there would be a cost of Rs700-750 mln on this 500,000 sq ft of land to be paid to the owners. The project will start in Sep.’07 and be completed by Mar’10.On a area of 11.27 lac sq ft available for sale we expect a profit of Rs.20 bln to flow to the bottom line from ’08 onwards.

Malad:

The Malad project is a pure commercial property where the company hopes to build a shopping complex of 43000 sq ft of carpet area. Since the commercial properties enjoy a 2 times multiple , the sale will be of 86000sq ft. The project will require purchase of about 22000 sq ft of TDR .

The commercial complex to be built on a land of 43000 sq ft will commence in ’08 and will be completed by ’10. The profits likely to accrue over this period from this project is Rs400 mln. The company has not yet finalised the consideration to be paid for the purchase of land which we estimate will be about Rs.100-150 mln.

Future prospects: The company plans to slowly move into development of real estate and construction of luxury apartments /commercial property in the suburbs .

Financials: (Rs.Mln.)

	Mar'07	Mar'08	Mar'09
	(Projections)	(Projections)	(Projections)
Net sales	80	2125	3069
O.Income	0.2	2	5
Exp	29.50	955	1738
Land cost	----	150	50	(Borivali land cost)
		500	250	Goregaon Land
		80	70	Malad Land
Opt. Profit	50.70	442	966
Int	0.10	20	20
Deprn	0.10	5	5
PBT	50.50	417	941
Tax	0.50	130	300
PAT	50	287	641
Equity	100	100	100
EPS	10	28.7	64.1

# Provision for land costs for Goregaon and Malad property has been made in these projections on an approximate basis.

The share has the potential to touch Rs.250 by June 2008.

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