Omaxe Limited Sees Substantial Reduction In Debt Levels

At a time when there is stagnation in the market, especially Metro cities and real estate companies have been witnessing the brunt of low sales and reducing profit margins; India’s leading real estate company Omaxe Limited has reduced its debt considerably and consistently. In the last 5 years, the company has seen its debt-equity ratio come down by close to 60%; from 1.15 in 2009-10 to 0.48 in 2013-14.

The present level of debt at Rs. 1,049 crores, company officials say is comfortable and aim to maintain at this level. The gross debt level has also come down by approx. Rs 800 crores in this period, a reduction of 40% from the peak debt level.

The Net Worth of the Company has grown by 38%; from FY 2009-10 level of Rs. 1,582 crores to Rs. 2,179 crores as on March 31, 2014.

Despite a slow economy and high interest-rate regime, many companies have of late struggled with huge debt levels. But Omaxe has seen consistent reduction in its debt on account of increased cash flows as a result of continuous construction, delivery and new launches. Increased cash flow is also on account of the right product mix that caters to the demand of specific cities propelling the company’s desirability among end-users. Catering to such needs have helped us create a bouquet of products that is both taste and income specific. From plots to floors, villas, group housing etc.; offerings such as these have helped Omaxe maintain an edge over peers and generate internal accruals.

Low margin but end user driven markets like Bahadurgarh, Rohtak, Vrindavan, Faridabad, Bhiwadi, New Chandigarh, Ludhiana, Jaipur etc. have been driving our sales over the past few years.

The company’s strategic move to diversify into these markets has seen presence increase to 30 cities across 9 states that are substantially end-user driven and contribute to consistent cash flows.

Financial Year	Gross Debt	Net Worth	Debt-Equity Ratio
2009-10	Rs. 1,814 cr	Rs. 1,582 cr	1.15
2013-14	Rs. 1,049 cr	Rs. 2,179 cr	0.48

- Mr. Mohit Goel, CEO, Omaxe Ltd.