MR Jaishankar, CMD, Brigade Enterprises Ltd (BEL)

Brigade Enterprises Limited's (BEL) property development portfolio covers luxury apartments, integrated enclaves, state-of-the-art software and retail facilities, offices, serviced residences, clubs, resorts, spas, hotels and schools. Some of its projects that are currently underway include: two large enclaves in Bangalore, one of the city's tallest office buildings, a large mall with a multiplex, world-class hill resorts & spas, 5-star hotels, a hospital and two schools. Over the years, Brigade has set quality standards for luxury residential projects in Bangalore and Mysore. It also pioneered the 'integrated enclave' concept in Bangalore, a decade ago, with the much-appreciated Brigade Millennium and Brigade Gardenia enclaves. In the domain of commercial space, Brigade is developing many world-class office and retail facilities. The upcoming Orion Mall & Mutiplex at Brigade Gateway is set to become a landmark destination.

MR Jaishankar, Chairman and Managing Director, Brigade Enterprises, holds a Bachelor of Science Degree in agriculture from the University of Agricultural Sciences, Hebbal, Bangalore and a Master of Business Administration from Manasa Gangotri, Mysore. He has 21 years of experience in real estate industry. Mr. Jaishankar has previously worked as a Sales Officer from 1977 to 1978 for UB-MEC Limited, and has 25 years of business experience. Prior to promoting the Company, he promoted MLR Industries in Peenya, Bangalore from 1979 to 1980, which was engaged in the manufacture of roasted chicory. After running MLR Industries for five years, he diversified into real estate development and promoted Brigade Investments, a partnership firm in the year 1986 which constructed among other Brigade Towers, Brigade Gardens, Brigade Manor, Brigade Parkview and Brigade Regency.

Speaking with Anil Mascarenhas of India Infoline, MR Jaishankar says, "Our strength also lies in the ability to manage multiple service providers."

You say your execution model is different from many others. Could you explain?

We follow a balanced business model where we outsource construction and design. We believe selective outsourcing activities enables us to reduce our operation costs and capital expenditures. For some of our projects we have New York-based real estate consultancy

firm, Hellmuth, Obata + Kassambaum, Inc. ("HOK"), to develop the master plan. We work with Architects like Zachariah Consultants, RSP Architects, Thomas Associates, Venkatraman Associates, Chandavarkar & Thacker among others and contractors like Simplex, Ahluwalia, Billimoria and Shapoorji among others.

We also outsource interior services. We do not award turnkey projects. Instead, we often do the procurement of many raw materials like cement and steel ourselves. This ensures the best of quality in our projects. Our strength also lies in the ability to manage multiple service providers.

We have a large team of senior project managers and around 210 engineers and architects to oversee the development of projects,

Would you look at developing commercial property and selling or would you opt for leasing?

We are looking at retaining ownership of most of the commercial spaces. As and when the regulator allows real estate investment trusts, or REITs, we will stand to benefit.

We will also look at development of residential properties to target lower income groups as well. We are already present in the higher and mid-segment.

Going ahead we will also leverage our strengths and experience in serviced apartments to get into luxury hotels and resorts.

Give us brief details about your IPO.

The price band has been fixed between Rs351 and Rs390 per equity share. The proceeds of the issue would be for acquisition of Land (Rs480mn) and Construction and development of ongoing projects (Rs5.12bn). The Issue has been graded IPO Grade 3 by ICRA Limited indicating average fundamentals.

We expect to raise between Rs5.83bn- Rs6.48bn (Including Greenshoe: Rs6.71bn to Rs7.45bn). The total issue is of 16,624,720 equity shares without Greenshoe and 19,018,428 equity shares with Greenshoe option. The Issue will constitute 16.87% of the fully diluted post issue paid-up capital of the Company assuming that the Green Shoe Option is exercised in full and 15% assuming that the Green Shoe Option is not exercised.

The issue would be open between Dec 10 �07 and Dec 13 �07. The Global Co-ordinators and Book Running Lead Managers are JP Morgan India Private Limited and Enam Securities Private Limited. The Book Running Lead Manager is ICICI Securities Limited.

What will the funds be utilized for?

The primary objective of the Issue is to fuel the future growth plans of the Company, including by way of acquisition of land, meeting construction and development costs in relation to the Company�s ongoing and forthcoming real estate projects and general corporate purposes.

The two large projects, Brigade Gateway and Brigade Metropolis comprise a large part of projects under execution. 75% and 67% of apartments pre-sold as of November 23, 2007 in Brigade Gateway and Brigade Metropolis respectively

What is your mix between residential and commercial? What kind of revenues come from the hospitality segment?

Brigade Enterprises operates out of a single entity and has a 100% subsidiary, which is in the hospitality segment. Brigade Enterprises is active in residential, commercial and hospitality segment. We are the pioneers of integrated, mixed-use enclaves and serviced residences in Bangalore.

In our ongoing properties, the total saleable area is 12.5mn sq ft. Of this 86.4% is in the integrated life style enclaves. Our integrated lifestyle enclaves are conceptualised as self-contained, gated communities, which generally include a combination of apartment complexes, commercial and retail space, recreational clubs, parks, schools, convention centres and car parking.

The Residential properties comprise 12.5% while Hospitality Ventures is 1.1%.

In Bangalore, we were one of the early developers of integrated lifestyle enclaves. Our residential properties include integrated lifestyle enclaves and apartment buildings. Our commercial properties include commercial office space, software and IT parks, schools, hospitals and retail malls with entertainment facilities, such as multiplexes.

Bangalore is a growing marketplace and 100 sq ft of office space will translate into roughly 500 sq ft of residential area. Bangalore is short of malls with just around two major ones.

Who are your clients in the commercial segment?

Our clients include Cisco Systems India Private Limited, Digi Captions India Private Limited, Mahindra Engineering Design & Development Company Limited, Mindtree Consulting Limited, Spice Communications Limited, Tata Coffee Limited and TTK Prestige Limited.

Could you share some numbers on your projects completed. How many are in the pipeline?

As of November 23, 2007, Brigade Enterprises Ltd. has completed a total of 67 properties, comprising 41 residential properties, 21 commercial properties and five hospitality properties, aggregating to approximately 5.67mn sq ft of saleable area and approximately 6.74mn sq ft of developable area. It is developing two integrated lifestyle enclaves, 12 residential properties and two hospitality properties, aggregating to approximately 12.53mn sq ft of saleable area and approximately 13.84mn sq ft of developable area. Its forthcoming properties (properties that are in planning stage, where approvals are in the process of being obtained but construction has not yet begun) include four integrated lifestyle enclaves, 16 residential properties, nine commercial properties and five hospitality properties, aggregating to approximately 23.14mn sq ft of saleable area and approximately 30.32mn sq ft of developable area.

You mentioned about your hospitality business. What is the plan here?

We are among the early developers of professionally-managed serviced residences in Bangalore. We have completed the development of and currently operate two serviced residences. We are involved in the hospitality business with �Brigade Homestead�, our serviced residences.

Who are you partnering for your hospitality segment?

We plan to operate erviced residences, hotels and resorts ourselves and through arrangements with international hotel operators, such as Starwood, InterContinental, Banyan Tree and Accor.

You have land banks in many places besides Bangalore. Give us an idea of your land bank.

Firstly, let me clarify, we are not in the land bank game. We have acquired land and development rights in various cities and towns outside Bangalore and Mysore such as Hyderabad, Chennai, Mangalore and Kottayam for future property developments.

Our Land Reserves aggregate to approximately 43.17mn sq ft of developable area, of which approximately 11.21mn sq ft of Developable Area is owned by us directly and approximately 2.99mn sq ft of Developable Area is owned by us through our nominees.

Our Land Reserves also include land taken on lease by us for which we hold the sole development rights and land for which we have joint development rights.

Could you share with us your financials?

Our consolidated total income was Rs4.17bn for the fiscal year 2007 as compared to Rs2.03bn for the fiscal year 2006 and Rs1.6bn for the fiscal year 2005. Our consolidated profit after tax was Rs714.98mn for the fiscal year 2007 as compared to Rs423.06mn for the fiscal year 2006 and Rs198.77mn for the fiscal year 2005.

For the six months ended September 30, 2007, the company has posted net profit of Rs444mn on revenues of Rs2.30bn.

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