With ongoing projects worth Rs 10,000 crore, Raymond Ltd. is using the capital-efficient Joint Development Agreement (JDA) approach to propel expansion in Mumbai’s real estate market. The CEO of Raymond’s real estate business, Harmohan Sahni, claims that the company has obtained five JDAs in strategic areas like Mahim, Bandra, and Sion.
Speaking to NDTV Profit, Sahni emphasised that JDAs have regained prominence in the past five years as they offer a capital-efficient approach, particularly in high-value land markets like Mumbai. He highlighted that the Indian real estate industry often struggles with capital constraints, forcing developers to raise funds periodically—an approach that investors find risky. JDAs, he noted, align the interests of landowners, developers, and the market, mitigating financial risks.
Sahni further admitted that previous regulatory ambiguities in Maharashtra and Mumbai have discouraged the implementation of JDA. The process is now more streamlined and predictable, though, thanks to the implementation of the Mumbai Development Plan (DCPR) 2034, the Real Estate Regulatory Authority (RERA) Act, and the Goods and Services Tax (GST).
Raymond expects an increase in pre-sales from areas outside Thane, which currently contribute 30% of its sales. This share is projected to rise to 35-40% next year. The company’s investor presentation indicates that its Thane land parcel has a revenue potential of Rs 25,000 crore.
Subject to government permits, sales for the Mahim redevelopment project are expected to start in the third or fourth quarter of next year. Raymond’s operating margins increased from 22.1% to 23.8% during the December quarter, while real estate income increased by 11% year over year to Rs 488 crore. According to the company, its potential real estate revenue is Rs 32,000 crore, and in the upcoming quarters, operating margins should stay between 20 and 25 percent.
Source: NDTV Profit
