Sheth Homes aims to reach INR 3,000 crore in revenue by FY25, up from INR 1,500 crore for FY24. Chairman Ashwin Sheth plans an INR 1,500 crore investment in FY25 and INR 2,500 crore in FY26. The company is preparing for a possible INR 2,000-3,000 crore IPO in 18-24 months, potentially raising its valuation to INR 10,000 crore. Sheth Homes has reduced debt from INR 1,500 crore in March 2021 to INR 400 crore by March 2024, with a goal of zero debt before the IPO. The firm is expanding with new projects in Mumbai and Bengaluru, targeting significant growth across various real estate segments.
Sheth Homes is aiming to reach INR 3,000 crore by the financial year 2024-25. This comes after achieving INR 1,500 crore in revenue for the year ending March 2024, marking a substantial increase from INR 500 crore in the previous fiscal year. Ashwin Sheth, Chairman and Managing Director, outlined plans for an INR 1,500 crore investment in FY25 and INR 2,500 crore in FY26 to support ongoing projects and expansion efforts.
The real estate developer has reported sales revenue of INR 1,486 crore for FY24, sustaining a gross profit margin of approximately 25%. To boost its operations, the company is preparing for a possible initial public offering (IPO) estimated at INR 2,000-3,000 crore within the next 18 to 24 months, which could elevate the firm's valuation to around INR 10,000 crore. As part of its strategic move, Sheth Homes is investing INR 20-23 crore in a major rebranding exercise, expected to take about six months.
Reducing debt has been a significant focus for Sheth Homes, which successfully lowered its debt from INR 1,500 crore in March 2021 to INR 400 crore by March 2024. Looking ahead, Sheth anticipates a temporary increase in debt due to expanding construction financing. However, he emphasised the goal of achieving a zero-debt status before the IPO launch, which is essential for enhancing investor confidence.
Currently, Sheth Homes caters to the mid-segment, upper mid-segment, and luxury housing markets and is exploring opportunities in the super-luxury segment. The company employs a diversified strategy that includes joint ventures (JVs), redevelopment of ageing housing societies, and slum redevelopment projects. Over 50% of the company's business derives from JVs, while redevelopment projects contribute about 20% and slum redevelopment makes up 25%.
The company is focusing on joint ventures to minimise the capital tied up in purchasing land. By partnering with developers and landlords, especially those lacking funding, Sheth Homes can manage multiple projects simultaneously, compensating for lower profit margins with higher volume. Currently, the company has eight active projects in Mumbai, covering 3.5 lakh square feet with an extensive scope of work totaling around 65 lakh square feet valued at approximately INR 4,320 crore.
In recent months, Sheth Homes has been launching new projects successfully, including two significant developments. The first project launched between January and March 2024 has a projected revenue of INR 4,000 crore, and the second, developed between April and June 2024, has a revenue potential of INR 2,800 crore. The company plans to introduce additional projects, with two scheduled for the July-September 2024 quarter and three more set for the October-December 2024 quarter.
Furthermore, Sheth Homes is broadening its reach beyond Mumbai, having acquired three new projects in Bengaluru that will be launched within a year. This includes a 50-acre villa community, a 60-acre plotted development, and a five lakh square feet mixed-use development, with an investment of around INR 70-80 crore. The company is also exploring expansion in Chennai, Pune, the National Capital Region (NCR), and Hyderabad, with plans to invest between INR 25-50 crore in each city.
In terms of housing delivery, the company aims to provide 2,000 apartments in FY25 and an additional 1,600 flats in FY26.
Additionally, Sheth Homes recently addressed internal management challenges, resolving a legal dispute involving Ashwin Sheth's sons, Chintan and Maulik Sheth, who each hold 40% stakes in Sheth Developers. The ongoing developments signal a robust strategic direction for Sheth Homes, positioning it for future growth in India's competitive real estate sector.
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