I haven’t spent a lot of time on this but here are a few observations being familiar with the Chandigarh/ Panchkula area.
The plot that they are developing in the Panchkula technology park was allotted to them around 2008. In the boom years of 2005-2008 , Chandigarh/Panchkul/ Mohali felt left out and the govt rolled put plans for setting up technology parks in the three towns. Except a mild response for Chandigarh from the likes of Wipro/Infosys, there was almost no response shown for Panchkula and Mohali. The main reason given then was that the city has no air connectivity and an IT company can’t work without that. In those days you had to take a flight to Delhi and then take a Shatabadi train to Chandigarh station which is a few kilometres from Mohali/Panchkula. Chandigarh airport has since been renovated and gets around 20 flights a day today and from today it will also start getting international flights.
While this was going on, the bubble burst and even the mild response vanished. At this time, some of the local businessmen of the area moved in and plots esp in the Panchkula technology park were allotted to them. Most of these companies were real estate companies and had very little to do with IT. The plots were given to them with the undertaking that they will develop the plots within 8 years of allotment.This is the reason that you see a flurry of activity to finish projects in 2016.
I could be very wrong here but to me this whole BPO business looks no more than a front for real estate activity. They will in all probability put up a small BPO front end to meet the govt obligations. However, there are no takers for office property for lease at the moment in that area. There are prime office properties in the heart of Chandigarh/ Panchkula that have been lying vacant for years and no hope of any occupation in the near future. Therefore, servicing the loan that they have taken for this real estate activity with no occupants will be a challenge.
This group also has another group company called Amravati developers which was in deep trouble a few years ago. They had announced a township about 20 kms away from Panchkula and the response was very tepid. So please be aware that this group has their fingers in a number of real estate projects in and around Panchkula and not all of them are doing well.
Need to dig more into the laminates business. One unusual thing that stuck me was the the total wage bill of the company is Rs1.32 crs and the wages taken by the directors and the CS is around Rs 1.18 crs. This leaves around 14 lacs for the wage bill for all others. Even if you take the annual wage of a shop floor worker at Rs 1 lac , that caters for roughly around 14 workers. I couldn’t see a line item where the workers could be contractors and the wages billed elsewhere. Where am i going wrong in the calculation?
Will talk to my local contacts and try to dig out more info.
Disc- Not invested.
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