Overview: Puravankara is a residential real estate development company located in Bangalore, India. The company was founded in 1975 in Mumbai, India by the current chairman Ravi Puravankara. During our visit, we met with the joint Managing Director, Ashish Puravankara, and the Chief Executive Officer, Jackbastian Nazareth. Over the past decade, the company has grown dramatically and is on track to continue to do so through its development of affordable apartment complexes catering to the middle class and its luxury apartment complexes catering to those who are already well-established professionals in the Indian economy.
Our Impressions Going In: Elliott and I were both very interested in this company due to our backgrounds in construction. We were curious as to how they operated and their strategies in marketing their properties to Indian consumers. In addition, during our initial research, we learned that there is a lot of concern regarding the Indian real estate market being in a bubble and it potentially bursting sometime in the latter half of 2013. We wanted to know their opinion regarding these predictions and if they had any strategy in place to deal with it.
Our Impressions Coming Out: To say we were impressed with the company would be an understatement. From the moment we walked in we were amazed by the facilities and the incredible knowledge and passion of both Mr. Puravankara and Mr. Nazareth. The company’s subsidiary, Provident, seemed to be the main focus of their presentation and our discussion. The company realized more than five years back that there was an opportunity available in the affordable housing market. With a rapidly rising middle class, there was little in the way of property available to those new Indian working professionals with steady incomes. The creation of Provident, and the subsequent research on the market, has led the company into a new market where they are doing very well. With the global economy still rather sluggish, Provident is providing Puravankara with the perfect opportunity to continue to grow and make a sizeable profit despite economic headwinds.
One interesting aspect of their operations was the focus on scientific research to establish Provident’s strategy. Rather than simply building apartment complexes the way they thought they should be built, and then hoping Indian consumers would be willing to buy them, the company conducted close to three years of research into what the consumers in their target market would actually want in an apartment. This allowed them to make over 450 sales in one weekend for one of their new developments. By catering their offerings to the individual markets, they are proving wildly successful in following this plan.
Lastly, Mr. Puravankara made it clear that one of the reasons they have been so successful is because they strive to make their business as clear as possible. They do not hide anything in regards to their finances or their operating activities. This has established a good amount of trust not only with their clients, but with their suppliers, their investors, and the government regulators they deal with on a regular basis. One of Mr. Puravankara’s quotes was, “I’m not in the business of selling you four walls and a roof…I want to sell you a lifestyle.” The company is proving wildly successful in selling the lifestyle of progress through its excellent business practices.