Real Estate Intelligence Report, Wednesday, May 20, 2009

Markets retain gains as FIIs infuse $1 b into equities

Markets retain gains as FIIs infuse $1 b into equities
The Hindu Business Line, May 20, 2009, Page 1

Record Rs 1.58-lakh cr turnover amid high volatility.

Our Bureau, Mumbai

Huge trading volumes on Tuesday illustrated that Monday’s stratospheric market rise was no flash in the pan. The benchmark stock indices were maintained at the levels reached on Monday as foreign institutional investors poured in a net $1 billion into Indian equities.

NSE’s cash market turnover at Rs 40,151 crore surpassed the previous high of Rs 28,746 crore touched on November 1, 2007. Its F&O turnover was over Rs 1 lakh crore, at Rs 1,05,985 crore, close to its all-time record of Rs 1,10,563 crore on October 18, 2007.

The combined turnover in the cash and F&O segments on both NSE and BSE was Rs 1.58 lakh crore (against around Rs 70,000 crore last Friday).

The Sensex and Nifty closed near flat after a highly volatile trading session. The Sensex gained just 18 points closing at 14,302. The Nifty closed five points lower, at 4,318.

FIIs were net buyers for Rs 4,793 crore, provisional data on the exchanges showed. Domestic institutions were net sellers for Rs 1,964 crore.

Client data on BSE showed that retail and corporate investors were sellers too, for a net amount of Rs 708 crore.

Trade pattern

The likelihood of another circuit breaker was on everybody’s mind as the opening bell sounded on Tuesday, but that didn’t happen, allowing retail, HNI and institutional investors to trade freely (The Singapore Nifty Futures were up by over 4 per cent at the time of the opening of the Indian market.)

The Sensex opened 456 points higher from Monday’s close (of 14284) as buy orders queued up, after which there was a bout of selling which brought it down over 900 points (from opening), to 13,834.

Brokers said some public sector domestic institutions, presumably instructed to sell, infused some liquidity into the markets. The volatility in the market was unabated after the initial sharp dip. The Sensex surged closer to the 15,000 mark (14,930) at around 1 p.m., also marking an intra-day gain of around 1100 points.

The index dipped on heavy selling in IT stocks; while resumption of buying saw solid buying in realty stocks, said a Sharekhan report.

But the intra-day high was not sustainable due to the profit booking that took place in the last two hours of trading.

The global markets were positive but didn’t have much impact domestically where the markets maintained their own dynamics after Monday’s 17 per cent gains. “The market was very volatile, as there was much euphoria in the market; there was heavy participation both on the buy and sell sides,” Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd, said.

The advance decline ratio on the BSE (1927:739) and NSE (906:331) was heavily in favour of the gainers. Realty, bank and capital goods stocks gained the most, their sectoral indices gaining between 6 per cent and 12 per cent.

The mid-cap stocks were in the limelight with many registering more than 20 per cent gains. Prominent gainers included India Infoline (25.39 per cent), Aban Offshore (21.54 per cent), and IVRCL Infra (21.33 per cent).

On BSE, many small-cap stocks hit their upper circuits.

FIIs infuse Rs 20k cr in 43 days

FIIs infuse Rs 20k cr in 43 days
The Times of India, May 20, 2009, Page 25

Bullish On India Growth Story Again, But MFs Pump In Only Rs 3300 Crore

Kumar Shankar Roy TNN

Chennai: Foreigners have been able to spot value better than Indians, at least as far as the stock market goes. FIIs have put in close to Rs 20,000 crore into Indian stock markets in the last 43 days since the bull rally began. Simply put, FIIs were daily net buyers of Rs 500 crore investments per day at a time the benchmark index went up above 14,000 from 8,160 levels. In comparison, mutual funds have been net buyers of Rs 3,300 crore - around 1/7th of the amount committed by FIIs.

According to Sebi data, FIIs have made net investments of Rs 19,820 crore till Tuesday from March 9, (when the 6,000-point rally began). The deluge of funds brought into the country by the FIIs has made them net buyers of equity for the calendar year 2009 at Rs 10,681 crore. They were net sellers of stocks amounting to a whopping Rs 52,987 crore in calendar year 2008.

FIIs are betting on companies reporting an improved financial performance in the years to come on the back of solid government policy initiatives. "We think the ensuing policy action will improve growth and thus earnings. We are forecasting 2.5% and 12.5% growth in earnings for sensex constituents in FY2010 and FY2011 respectively compared to our earlier forecast of minus 10% and 11%," Ridham Desai of Morgan Stanley said.

While many investors are waking up the possibility of Indian economy coming back on track with a smootherthan expected government formation, experts say the bet taken by FIIs for the last 2 months has paid off.

In the last one month, foreign investors have also aggressively taken up stakes in cash-strapped real estate companies such as DLF, Unitech, Indiabulls Real Estate as well as Suzlon either through qualified institutional placements or direct buying on the stock exchanges from the promoters. This has helped FIIs who actively participated in such offerings to immediately sit on significant gains (notional).

Deals like DLF promoters selling off 16.8 crore shares at Rs 230 apiece (current price Rs 385), Indiabulls Real Estate just sold off 15 crore shares at Rs 185 (current price Rs 200) and Unitech sold off 42 crore shares at Rs 38.50 apiece (current price Rs 71) show how foreign investors profited.

A re-rating of the markets is likely to take markets to expensive territory relative to current earnings but an improving fiscal situation would improve the optimism regarding growth next year, Jyotivardhan Jaipuria of Bank of America Merrill Lynch said. However, cautious mutual funds have stuck to debt as their choice of asset during the same period - taking a diametrically opposite view. While FIIs were net sellers of debt to the tune of Rs 3,500 crore from March 9 - fund majors were net buyers having put Rs 46,000 crore into debt during the same time.

Contraction easing, recovery likely by year-end: Zoellick

Contraction easing, recovery likely by year-end: Zoellick
The Financial Express, May 20, 2009, Page 11

Reuters, Madrid

The pace of contraction in world economic output appears to be easing and recovery could begin at the end of this year, World Bank President Robert Zoellick told Spanish television on Tuesday. “I’m neither an optimist nor a pessimist, I am uncertain, a realist. Clearly the fall has been interrupted. I think there’s a good chance that while we face declines, they will be smaller in size. The majority expect a recovery at the end of this year, at the beginning of next year,” Zoellick told an interviewer in remarks translated into Spanish by an interpreter.

Speaking ahead of a meeting with Spanish President Jose Luis Rodriguez Zapatero, Zoellick said financial market conditions were improving and urged developed countries to boost support to poorer states to ensure a truly global recovery.

“What you’ve seen is financial markets clearly showing signs of recovery in developed countries,” said Zoellick. “It’s not enough to focus on markets. If we don’t look at unused capacity in the global economy the recovery will be slower, so we have to make enough resources available to those who are weakest.”

Realty firms are first off block with major fund-raising plans

Realty firms are first off block with major fund-raising plans
The Financial Express, May 20, 2009, Page 1

Corporate Bureau, New Delhi

Real estate companies seem to be first off the block to access capital markets to raise funds, barely days after a stable government at the Centre became a possibility. Unitech promoters said on Tuesday they planned to invest Rs 1,000 crore in the next 18 months by subscribing to convertible warrants—debt paper that can be converted to shares at predetermined prices. The first tranche of Rs 275 crore will be invested in June.

The move is expected to encourage investors in the company about the long-term plans of its promoters, despite a debt overhang of Rs 8,500 crore. The promoters are expected to finance the investment by exiting from non-core businesses. Following the conversion, the promoter stake in Unitech is likely to rise by 7.5-10%. It is currently at 51.2%. Unitech shares rose 10% to close at the NSE at Rs 70.95.

The company told exchanges it would call an extraordinary general body meeting of shareholders for approval. The plan to invest in convertible warrants follows the Rs 1,621 crore that Unitech raised recently through a placement of its shares with investment companies—a qualified institutional placement.

Unitech’s announcement comes just a day after Indiabulls said it planned to raise up to Rs 3,000 crore through the same qualified institutional placement. Company director Gagan Banga said, “We are planning to use the money to invest in our power project, new commercial and residential projects, apart from servicing our debt of Rs 1000 crore.”

Real estate companies have reason to move quickly. The realty index was the largest mover on the BSE on Tuesday. It rose by a massive 12.8%, double the rise in the next best sector, banking, at 6.84%. The IT index slipped despite the 10.1% market surge.

Realty firms had leveraged themselves massively in the stock market in the upswing until last year. The result is a debt overhang that all companies are finding it difficult to service. Other than Unitech, DLF has a debt of Rs 16,358 crore, HDIL has a debt load of Rs 4,000 crore.

Indiabulls Real Estate raises $550 mn through QIP

Indiabulls Real Estate raises $550 mn through QIP
Business Standard, May 20, 2009, Page 6

BS Reporter / Mumbai

Indiabulls Real Estate (Ibrel), a major property developer, has raised $550 million (Rs 2,585 crore) by selling shares at a discount to overseas investors on Monday, a person involved with the share sale said.

Ibrel sold 139.7 million shares at Rs 185 a share to investors, including TPG Capital and Fidelity, the source said. The issue price was 6 per cent lower than Monday’s price of Rs 197.50, when the Sensex soared by over 2,111 points.

However, the issue price is 60 per cent higher than the company’s six-month average price of Rs 115.66.

Ibrel, which opened its $600 million issue on Monday, received subscription worth $2 billion (Rs 9,400 cr), a company source said. The company spokesperson did not respond to calls on the development.

“The response to the issue was good. Investors got 20-30 per cent of what they applied for,” sources said, without elaborating. Morgan Stanley was the lead manager.

The development comes on the same day when Ibrel’s board approved the $600 million qualified institutional placement (QIP) in its extra-ordinary general meeting.

Though the company did not say anything on the end use of the QIP proceeds, sources said it was expected to be used for power projects, mainly the 1,320 Mw one planned to be built at Amravati, Maharashtra, and for new businesses.

Indiabulls QIP sold in a day

Indiabulls QIP sold in a day
The Economic Times, May 20, 2009, Page 17

Our Bureau MUMBAI

INDIABULLS Real Estate is learnt to have sold its $600-million qualified institutional placement (QIP) in a day. Sources close to the issue said the country’s third largest developer had received total applications worth $2 billion from private equity and hedge funds including Farallon, TPG Capital, Och Zoff, Moon Capital and Fidelity. It is also learnt that the company has placed the QIP at Rs 185 per share, slightly lower than the ruling market price of the stock. The Indiabulls stock closed at 199.75 on Tuesday.

When contacted, Indiabulls CEO Gagan Banga said: “I can only say that the book has been closed. I would not be able to share the details of the issue at this point of time.”

Indiabulls announced its plans to raise funds through QIP on Monday. It was the first instance of an equity issue which was aimed at riding the improved sentiment in the stock markets, post general elections. The issue opened on Tuesday. Morgan Stanley is the advisor to the issue. Indiabulls is expected to announce the details of the issue by this week.

Domestic realty players are going through tough times due to liquidity problems as well as shortage of fresh demand. New projects were put on the backburner for some time while many of those under construction are delayed. Though this situation, say industry experts, may improve following the performance of BSE during past two days. Last week the India’s largest listed developer, DLF raised $783 million through a share sale. DLF is also looking at selling some of its land parcels.

Another realty major Unitech had raised $325 million through a QIP last month. It is believed the QIP proceeds were used to bring down the company’s debt of Rs 8,900 crore. Unitech sold shares through the issue at a 11% discount to the stock’s last closing rate. However, market sentiments have dramatically improved since the Unitech issue.

DLF, Unitech aim to lower debt burden

DLF, Unitech aim to lower debt burden
The Hindu Business Line, May 20, 2009, Page 1

Moumita Bakshi Chatterjee, New Delhi

Real estate major DLF aims to nearly halve its current debt position of Rs 14,000-15,000 crore by the end of the financial year, and its rival Unitech wants to lower borrowings to Rs 6,000-6,500 crore from the existing Rs 7,800 crore.

Market analysts said that although the two companies have outlined aggressive plans to lower their debt obligation, achieving the target could take more time. “The companies are going for asset sale or sale of non-core businesses and that cannot be done overnight. The intention is correct but it may take time,” said a Mumbai-based analyst.

Market observers also felt that while the residential market appears to be showing some signs of improvement, it may be too early to raise a toast.

De-leveraging path

In an investor presentation circulated last evening, Unitech said that its operational strategy (improved operational cash flow, monetisation of non-core assets and debt management) along with recent fund-raising activity (QIP issue) had resulted in a “comfortable liquidity position”, but that debt levels were “still high”.

“De-leveraging will remain a focus area to reduce the interest expense, and utilise the saved cash for project development,” it said.

Unitech claimed that it has sold projects worth Rs 850 crore between April 1 and May 15.

The company is looking to prune debt to Rs 6,000-6,500 crore during FY10. Its debt stood at Rs 10,900 crore in December 2008 but subsequently dropped to Rs 8,400 crore after the Unitech-Telenor deal saw Rs 2,000 crore of telecom debt being transferred to Unitech Wireless’ balance sheet.

Asset sale

Unitech’s target for lowering the debt largely hinges on asset sales (commercial property in Saket, sale of hotels, school and hospital plots). It hopes to reduce the debt to Rs 4,500-5,000 crore by the first half of FY2011.

The promoters of DLF recently raised Rs 3,860 crore by selling their stake to institutional investors. Of this, nearly Rs 1,800 crore is likely to be injected into the privately-held DLF Assets Ltd which, in turn, will use the proceeds to pay DLF on “contractual obligations”.

“The Group would also raise money through sale of non-core assets such as the wind power business, and it has also put hotel sites on the block,” a senior DLF official said.

The official indicated that the Group may realise Rs 1,000-1,200 crore from the wind power business. “Similarly, the sale of our holding in Hindustan Spinning Mills site could fetch another Rs 400 crore,” the source said citing certain instances of asset sales.

Unitech promoters to infuse Rs 1,000 crore

Unitech promoters to infuse Rs 1,000 crore
Business Standard, May 20, 2009, Page 6

BS Reporter / Mumbai

Also divesting stake in its non-core assets such as hotels.

Unitech Ltd, the country’s second-biggest real estate developer, has announced the approval of a plan by its board to raise additional long-term funds by selling securities and issuing convertible warrants to its promoters.

This was communicated by the company in a statement to the BSE.

A source involved with the development said the promoters will invest as much as Rs 1,000 crore through subscription of the warrants, of which Rs 275 crore will be brought in by June.

After conversion of the warrants, the promoters’ stake is expected to go up by 10 per cent to 61 per cent.

“The subscription to the convertible warrants emphasises the confidence of the promoters in the company,” a company official said on condition of anonymity.

The additional infusion of capital is expected to help the company in reducing its debt to equity ratio considerably. The realtor has about Rs 8,400 crore of debt on its books.

The move to infuse additional capital into the company comes after Unitech offloaded some stake worth $325 million last month to select investors in order to tide over tight liquidity.

The promoters’ stake had fallen to 51 per cent after issue of new shares to overseas investors.

The promoters of Unitech are expected to liquidate their investment in other ventures to bring in the additional capital, the source said.

Indian realtors are facing a severe cash crunch as sales of offices, homes and shops have tumbled, owing to the economic slowdown.

In an attempt to boost cash flows, Unitech and other developers are now focusing on launching affordable housing projects, which have received a good response from buyers in the past couple of months.

Unitech is also divesting stake in its non-core assets, such as hotels and land parcels meant for other purposes. The New Delhi-based real estate developer has already raised Rs 231 crore from sale of a hotel in Gurgaon.

The company plans to sell four of its hotel projects, including in Noida, Kolkata and Gurgaon, as part of its asset sale plan and will also bring in private equity at project level.

Besides, the company has decided not to acquire land in the near future, except for extremely attractive opportunities.

Unitech to raise funds via securities

Unitech to raise funds via securities
The Times of India, May 20, 2009, Page 25

Amrita Nair-Ghaswalla TNN, Mumbai

Real estate majors, hit by a severe cash crunch after high prices kept buyers of homes, offices and shops away, are in a frenzy to raise money. On Tuesday, cash-strapped builder Unitech received the approval of its board to raise additional long term funds by issuing securities.

On Monday, Indiabulls Real Estate raised $550 million by selling shares, while last month, the country's largest realty giant, DLF, raised $783 million by selling promoters' stake. In a bid to lessen its debt levels, the Bangalore-based realty developer Sobha Developers is also set to raise long term capital during the current fiscal (FY10).

Unitech's board has also agreed to raise funds by issuing warrants to the promoters, an official said. Last month too, Unitech had raised $325 million through a QIP (qualified institutional placement) ‘‘to part retire its Rs 8,900 crore debt and strengthen its balance sheet. The promoter holding in the company had fallen to 51% from 64%, post the QIP'', the official added.

‘‘The global credit crunch has adversely impacted the realty segment, leading to delay in under-construction projects and postponement of new projects,'' an analyst tracking the sector said. ‘‘This has ensured that most firms are in talks to sell prime properties,'' the analyst with Angel Broking added.

Unitech also plans to generate Rs 900 crore from the sale of two hotels in Gurgaon and a commercial office complex in Saket, New Delhi, by the end of June. The company plans to generate Rs 1,600 crore by selling assets, including plots and residential projects, by the end of the current fiscal.

In April '09, the company raised Rs 1,625 crore from share sale to select investors, as part of a plan to repay debt and invest in affordable housing projects. The company allotted 42 crore equity shares of Rs 2 each at a price of Rs 38.50 per share to 55 QIP allottees, the official added.

While DLF promoters recently sold a 9.9% stake to raise Rs 3,860 crore, the company also plans to raise Rs 10,000 crore in the next 2-3 months by selling some of its real estate projects.

Sources said Bangalore-based Shobha Developers is in the process of disposing land where projects cannot be launched in the near future.

Tata Capital Housing Finance NHB nod to open shop

Tata Capital Housing Finance NHB nod to open shop
Business Standard, May 20, 2009, Section II, Page 2

BS Reporter / Mumbai

Tata Capital Housing Finance Limited (TCHFL), a wholly-owned subsidiary of Tata Capital, has been registered with the National Housing Bank as a housing finance company (HFC) and is now permitted to commence business.

Incorporated with an authorised capital of Rs 100 crore of which Rs 10 crore has already been subscribed, the firm will focus on Tier I and Tier II cities. It plans to establish 35 outlets by the end of FY10.

Tata Capital already has a presence in retail finance with a products suite comprising auto loans, personal loans and property. The size of its asset portfolio is Rs 8,000 crore, which is equally divided between retail and corporate loans. “A separate subsidiary will help us consolidate and focus on our housing finance business. We intend to leverage the Tata name and the Tata Capital brand,” said Praveen Kadle, managing director, Tata Capital.

The firm will sanction loans between Rs 2 lakh and Rs 2 crore for up to 85 per cent of a property’s value. The maximum duration of loan repayment will be 240 months while the minimum will be 12 months. The firm hopes to disburse a minimum of Rs 200-400 crore worth of loans in the first year of operations and intends to match industry benchmarks in terms of interest rates.

When asked if firm was looking to grow through acquisitions, Kadle replied, “We will look at inorganic growth only if valuations make sense. The condition of the balance sheet of the HFC up for sale will also be a factor.” Kadle added the firm has not finalised any deals with Tata Housing, the property development of the Tata group. Tata Housing recently unveiled plans to develop apartments priced below Rs 4 lakh for the low-income segment at Boisar, 100 km from Mumbai.

Spurt in REITs may signal revival of realty sector

Spurt in REITs may signal revival of realty sector
The Economic Times, May 20, 2009, Page 17

Supriya Verma Mishra ET INTELLIGENCE GROUP

THEmarked improvement in performance of Real Estate Investment Trusts (REITs) in recent months, including those set up by Indian developers, is being seen as a pointer to an imminent revival in the property market.

Indian property developers’ overseas-listed REITs such as Ascendas, Hirco, Unitech Corporate Park and Ishaan have nearly doubled in value from a year ago even as the FTSE Global Real Estate Indices for Asia, Europe and US have appreciated by 50% since March 2009.

The improved market conditions could also pave the way for the REIT listings of DLF and Unitech, which have been put on hold.

REITs are entities that that own and manage a portfolio of real estate properties. Anyone can invest in a publicly traded REIT, which is seen providing the advantages of liquidity and diversity because it invests in a portfolio of properties.

REITs are currently not allowed in India but the Securities and Exchange Board of India has rules for its implementation. Globally, about $8.7 billion has been raised through REITs in the past few months.

“With a stable government there has been a positive view on the Indian economy in the international market. Residential property will predominate this upturn,” says Hirco Chairman Niranjan Hiranandani.

As stock prices typically discount future events, the upturn in the REIT market can be attributed to an imminent revival in the residential real estate space in the near term. Investment in REITs is becoming increasingly attractive as property prices have declined 30-50% from their peak. This provides the potential for investors to make attractive long-term capital gains while enjoying rental yields in the interim, particularly at a time when interest rates are at historic lows in most countries.

Punj Lloyd to exit realty business

Punj Lloyd to exit realty business
The Economic Times, May 20, 2009, Page 5

Engineering & Construction Firm To End JV With NCR-Based Ramprastha Group

Our Bureau NEW DELHI

ENGINEERING and construction company Punj Lloyd is exiting real estate business by ending its two-year-old joint venture with NCR-based realty firm Ramprastha group. Ramprastha group will buy Punj Lloyd’s 50% stake in the joint venture company that was supposed to develop 29-acre residential project in Ghaziabad.

“We are no more interested in being a developer. Ramprastha will buy our stake and a deal is being worked out,” Punj Lloyd chairman Atul Punj said, adding that a bad real estate environment had prompted this decision. Punj Lloyd was supposed to do the entire construction for the Ghaziabad housing project.

Mr Punj said his company will continue to take housing construction orders, but had abandoned its ambition to become a developer. The company is executing some state-promoted housing projects in the Middle East.

On the possibility that a stable UPA government will mean more infrastructure projects and thus more business from India for the company, Mr Punj sounded sceptical: “It will depend on how fast the government moves on the infrastructure projects. Allocation has never been a problem in India, but the implementation has been.” India’s share in Punj Lloyd’s total revenue today stands at 20%.

The company today has a order backlog of $4 billion. It has increased its average ticket size of orders from $25 million three years ago to $225 million now. “We are targeting an average order ticket size of $500 million now,” Mr Punj said.

Loss in FY09 due to SABIC case: Atul Punj

New Delhi: Engineering firm Punj Llyod on Tuesday said it had reported a loss of Rs 253 crore in the just concluded quarter due to the negative impact of around Rs 220 crore incurred on a litigation between UKbased subsidiary Simon Carves and SABIC Petrochemicals. “There was a unplanned and unexpected negative impact due to a litigation with SABIC Petrochemical and our subsidiary Simon Carves. We just opted to write it off and stop speculation once for all,” said Punj Llyod chairman Atul Punj while addressing a press conference. — PTI

Sobha Developers' full year net down 52%

Sobha Developers' full year net down 52%
The Hindu Business Line, May 20, 2009, Page 3

Bangalore: With a slowdown that has practically brought the real estate market to a standstill, Sobha Developers recorded a 32 per cent dip in revenues for the financial year 2008-09 at Rs 967.9 crore compared with Rs 1,422.6 crore for the previous year.

Its net profit decreased 52 per cent for the year at Rs 109.7 crore (Rs 228.3 crore). Its contractual business, which has been contributing significantly to its revenues, stood at Rs 397 crore (Rs 583 crore).

J.C. Sharma, Managing Director, Sobha Developers, said the economic downturn has had a major impact on the company in terms of reduction in sales and profits.

"While we have been able to successfully negotiate with most of our lenders for rescheduling the debt repayments in the near term, we also plan to raise long-term capital during the fiscal so as to augment the capital base and reduce the debt levels," he said.

Raising funds

S. Baaskaran, Chief Financial Officer, said the company plans to raise "anywhere between Rs 325 crore and Rs 400 crore" through qualified institutional placement depending on the valuation.

Besides, it also plans to raise about Rs 200 crore through investment via a special purpose vehicle.

Land sale

Sharma said the company is "discussing with various investors for the development of specific projects. We are also in the process of disposing of certain land in which projects cannot be launched in the near future."

According to Baaskaran, the company plans to raise about Rs 200 crore through the sale of land.

Sharma said the company is confident that these efforts will lead to a significant improvement in cash flows and the debt-equity ratio will come down before the end of this financial year.

The company has also realigned its sales and marketing focus to meet the emerging opportunities, both at the strategic as well as tactical levels.

"To do this, we have initiated several proactive measures to target this audience and invigorate sales through adopting 'innovative practices' in marketing, varying product mix, designing customised offerings for institutional sales, enhancing both the width and depth of customer reach," said Sharma.

Though these are challenging times, "there is no fear that the market might collapse. The worst is over. Market is thriving, and we are trying to tap that market now", he said.

In order to make cash flows comfortable for the next year, the company is also pruning unnecessary costs and manpower.

The company has implemented a 10 per cent cut in salaries and would downsize staff, if the situation warrants.