Incorporated in 1995, Keystone Realtors is one of the prominent real estate developers engaged in construction, development in micro markets under ‘Rustomjee’ brand name.
Projects: They currently have 32 completed projects, 12 ongoing and 19 upcoming projects in MMR (Mumbai Metropolitan Region). They have developed 20 million sq ft of high value, affordable, super premium and mid mass segment residential, corporate, retail and landmark places. The company has delivered 280+ buildings, 14,000+ homes and 2 township projects till June ‘22.
Business model: The company enters into joint development and redevelopment agreements with land owners or developers to ensure a low upfront investment.
Objective of the issue: The company intends to make repayment/prepayment of borrowings and to fund its future real estate projects.
Strengths And Risks
+ Well established brand in the MMR region: The company operates in micro markets of Mumbai e.g. Juhu, Bandra, Khar, Bhandup, Virar and Thane. The well recognised brand reputation enables it to command a premium pricing in the market.
+ Well diversified portfolio: The company has experience in developing premium projects, stand alone buildings, townships, gated communities, affordable housing and redevelopment projects. The developer is a prominent name and the wide range of projects shields it from market risks.
+ Asset ownership: The company unlike other real estate players works jointly with developers and landowners for development. It does not incur heavy upfront investment in land ownership and keeps low debt obligations.
+ Project execution: The company unlike other real estate players works jointly with developers and landowners for development. It does not incur heavy upfront investment in land ownership and keeps low debt obligations.The company has garnered domain knowledge over the years, inhouse expertise and functional capability to deliver projects in line with customer expectation as well as regulation.
+ Leveraging technology: The company uses technology to maximise productivity, efficient vendor and material management, reduce delays and wastages and adhere to project timelines.
- Geographic concentration: The company operates in MMR micro markets and therefore at risk to market or price changes or regulatory changes specific to the region. Limited experience in other markets is a barrier to entry elsewhere in India for expansion.
- Macroeconomic factors: Real estate sector is impacted directly by rising interest rates, inflation, raw material costs and policy changes. Global inflation and recession pose a risk of real estate sector slowdown.
- Socio-economic factors: Black swan events like Covid can impact the real estate market with demand and supply side glitches.
- Land parcels: Since the company does not acquire land upfront or for future development, a shortage of land or significant rise in land prices can impact the company’s business.
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