Safe Harbor This p presentation contains certain forward looking g statements concerning Parsvnath Developers, Ltd’s business prospects and business profitability, which are subject to a number of risks and uncertainties. Actual results may differ materially from those projected in such forward looking statements projected in such forward looking statements. The risks and The risks and uncertainties relating to these statements include, but are not limited to, fluctuations in our earnings, our ability to manage growth, our competition, economic growth in India, our ability to attract and retain highly skilled professionals, time and cost over-runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulations, interest, and other fiscal issues generally prevailing in the economy The company does not issues generally prevailing in the economy. The company does not undertake to make any announcement in the event any of these forward looking statements become materially incorrect in the future, or to update any forward looking statements made from time to time on behalf of the company. 2
Executive Summary • PDL is a leading Indian real estate developer o Strong track record of execution across India o Explosive growth potential focused on executing in a responsible p g p g p manner o Land bank gives company long runway for future growth • India and its explosive real estate outlook p o India currently sitting on $315BN in forex RESERVES with an increasingly young and productive population o Estimated shortage of 20MM+ homes currently across India with d demographic trends likely to drive more acute shortages going hi t d lik l t d i t h t i forward – inflection point of age demographics similar to the US in the 1960s o Govt of India targeting more than $1TN of investment in g g $ infrastructure over the 12 th 5-year plan (2012-2017) – double the amount in the prior 5-year plan o RBI signaling on verge of tempering interest rate hikes • Outlook o Corporate strategy and market conditions conducive to improving cash flow and balance sheet and balanced growth o Solid top tier management with experience and expertise and a S lid t ti t ith i d ti d deep second and third line of management 3
India Real Estate India Real Estate Industry Dynamics 4
Industry Dynamics and higher income levels and higher income levels… Increased Urbanization… Increased Urbanization Indian Urban Population Indian Urban Population p India Per Capita Income India Per Capita Income p 35000 600 45.0% 40.0% 30000 500 35.0% 25000 400 30.0% Millions 25.0% 20000 300 INR 20.0% 15000 200 15.0% 10 0% 10.0% 10000 100 5.0% 5000 0 0.0% 1995 2000 2005 2010 2015 2020 2025 0 Urban Population Percent of Total FY04 FY05 FY06 FY07 FY08 FY09 Source: UN Source: CSO The current trend will continue to drive The current trend will continue to drive India is seeing a large migration to the India is seeing a large migration to the demand in urban demand in urban areas areas middle class middle class 5
Industry Dynamics • Over the next 20 years, 68 cities in India are likely to have a population over 1MM people (vs. 42 today) – only 35 cities in Europe and 9 in the US today) – only 35 cities in Europe and 9 in the US have populations over 1MM people • C • Currently only 31% of India’s population is located tl l 31% f I di ’ l ti i l t d in urban areas • 60% of India’s population is below 30 years old - the UN estimates that the 25-34yr age group in India will grow 9% between 2010 and 2015 or by 17MM will grow 9% between 2010 and 2015 or by 17MM - placing India at an inflection point of housing growth similar to the US in the 1960s • Average real household income (adjusted for inflation) is projected to grow over 5%/yr through ) p j g y g 2025 with the household savings rate throughout the country averaging 21-24% 6
Industry Dynamics • Accordingly, housing demand has pushed ahead of supply – a dynamic that will likely remain in place for the foreseeable future India Urban Housing Shortage India Urban Housing Shortage 25 20 15 15 s Millions 10 5 0 2001 2005 2008 2010 2014 Source: CRISIL The 2008 ‐ 2009 pause did not impact the The 2008 The 2008 ‐ 2009 pause did not impact the The 2008 2009 pause did not impact the 2009 pause did not impact the supply/demand imbalance supply/demand imbalance trend trend 7
Industry Dynamics • Estimated shortage of 24 MM+ homes currently across India with demographic trends likely to drive more acute shortages going forward • Average real household income (adjusted for inflation) is p projected j to grow g over 5%/yr y through g 2025 with the household savings rate throughout the country averaging 21- 24% • Country-wide, leverage in residential real estate market remains very low with mortgages throughout India averaging only 9% of GDP (vs. the US at 80%+) – worst averaging only 9% of GDP (vs. the US at 80%+) worst case, this lack of leverage should provide a degree of downside price protection in home values – if the global capital markets were to normalize capital markets were to normalize, the growth in the the growth in the Indian mortgage market could add even more upside to housing demand • RBI signaling on verge of tempering interest rate hikes. 8
Industry Dynamics • Even in the depths of the global credit freeze of ‘08- ’09 India’s construction growth was 6%yoy a level 09, India s construction growth was 6%yoy, a level that has since begun to reaccelerate India Construction Spending Growth, Y India Construction Spending Growth, Y ‐ Y 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% FY06 FY07 FY08 FY09 FY10 FY11e FY12e Source: Economic Advisory Council to the Prime Minister, July 2010 We believe the bottom is behind We believe the bottom is behind us us 9
Industry Dynamics • Pricing trends have also begun to reaccelerate in every segment of the industry Historical Average Price vs. 2011 Historical Average Price vs. 2011 250 200 $ per ft 2 150 US 100 50 0 0 Residential Commercial Plots Average Through FY2010 FY2011 Average FY2011 Average Pricing is on the rebound in all segments Pricing is on the rebound in all Pricing is on the rebound in all Pricing is on the rebound in all segments segments segments 10
11 Parsvnath Developers Ltd. About…… About
What is Parsvnath? • We are a real estate developer with over two decades of execution excellence Completed 45 projects with total area of 15.8M ft 2 o 50 projects with a total area of 77M ft 2 are in o development or construction Of the 77m ft 2 in development, 36.5M ft 2 has been o sold as of Sept 30, 2011, 23.2M ft 2 of which were empty plots, providing near term cash flow • We have a strong management team Top management recognized as thought leaders in o the real estate development space We have a deep bench, with strong 2 nd and 3 rd o level managers level managers - strong project execution capability strong project execution capability with experienced in-house construction and procurement teams • We have a diversified, pan-India presence Our Land Bank of 199M ft 2 spans over 44 cities o and 15 states Key Business Segments: o � Residential, across the spectrum � Commercial, both Office and Retail � DMRC Projects (Delhi Metro Rail Corp) � Hotels � Special Economic Zones (SEZs) � IT Parks • W We have strong project finance partners h t j t fi t Lowers financial risk o Improves execution o 12
PDL Strategy and PDL Strategy and Project Execution E Examples l 13
Our Strategy • Residential – Focus remains on developing high margin residential and township projects (54% of completed projects and 93% of projects under execution on a saleable area basis) – integrated township plot sales help boost near term cash flow • Lease Rental – Build out a portfolio of high value commercial Lease Rental Build out a portfolio of high value commercial and hospitality properties that yield recurring revenue, improving company resilience to periods of tighter liquidity • P • Partnerships – Continue to develop private equity t hi C ti t d l i t it partnerships on a project-by-project basis to reduce liquidity and execution risks • Financial – Focus is on improving cash flow, leveraging both our land bank and recent PE partnerships - work down debt where we expect to be in a net cash position by FY15 - divestiture of non core assets largely completed in FY11 divestiture of non-core assets largely completed in FY11 • Diversified Pan-India Mix – 41% of saleable area in Delhi/NCR, 24% in western India, 19% in southern India, 16% , , , in northern India (based on the projects under execution) 14
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