Revenue mix in real estate to be 65-70%: KSL

KSL & Industries has recommended a dividend of 10% and has also come out with a bonus issue in the ratio of 1 share for every 5 held. The company is moving into the field of real estate. It is coming up with its real estate projects in Nagpur and Kolhapur.

In Nagpur the company, informs its Chairman Saurabh Tayal, is developing residential apartments, IT park, five star hotel, mall with multiplexes.

In the next couple of years the company is expecting its real estate business to grow manifolds.

Tayal says that the revenue mix in real estate will be about 65 - 70%.

Excerpts from CNBC - TV18's exclusive interview with Saurabh Tayal:

From being mainly a textile play, you are shifting your focus to real estate. What are the plans that you have for real estate business?

For real estate, we have designed a very strong strategy. We are coming up with real estate in Nagpur and Kolhapur. In Nagpur, we are developing residential apartments, IT Park, five star hotel, mall with multiplexes. We have identified the best of the team possible in the country. We have hired Hafeez Contractor for architecture and we have also taken Shapoorji Pallonji.

What is the total land bank that the company is sitting on?

As on date, we have got land bank in Nagpur and Kolhapur. Then we have certain textile mills, which are in the city, which we would be shifting behind, and developing real estate over there.

Last year, you had announced to make investments in your textile business, has that been completed?

We were implementing 150,000 spindles totalling to Rs 600 crore. Out of which 50,000 spindles have already been implemented. Roughly a sum of around Rs 125 crore has already been spent. The project is in full swing. We hope that the project should be completed by October 2006.

At the end of it, what will be your spindleage, and what will be your working capacity?

Our aggregate spindleage would be 216,000. So it will be totally vertically integrated unit.

What will the division be in revenue term between real estate and textiles? What are the margins in each, and will you ultimately spin off both the divisions as separate companies, or will they carry on as one company?

In the next two - three years, the real estate business will grow manifolds. Roughly revenue mix would be about 65 - 70% in real estate.