Real Estate Intelligence Servic, Monday, July 27, 2009

9-10% growth by Sept 2010: Pranab

9-10% growth by Sept 2010: Pranab
The Economic Times, July 26, 2009, Page 8

First Signs Of Revival To See Particularly In Cement & Steel Sectors By Early Next Year, Says FM

Smitha Venkateswaran GOA

UNION finance minister Pranab Mukherjee on Saturday said India will take one-and-a-half years to come back to a 9% growth rate.

"We are still facing many problems of recession; it will take time to get back to 9-10% of GDP. Earliest signs will be visible by September 2010," said Mr Mukherjee while addressing an interactive session with businessmen in Goa.

Mr Mukherjee was in the coastal state to unveil the Indian Customs and Central Excise National Museum — the first of its kind in India. Maintaining that India and China have managed to curtail the impact of recession to a "great extent," Mr Mukherjee acknowledged that the economic slowdown that began in the US has taken its toll on India.

"For many years from 2003 to 2009, we enjoyed an average 8.6% growth rate but this has come down heavily with the meltdown. At least I feel the worst is now behind us," he said.

The first signs of revival, the FM hopes, to see particularly in the cement and steel segments by early next year. "We have ejected Rs 1,86,000 crore already into the economy, even with the burden of the Sixth Pay Commission on us. This will show results," he explained. Reiterating the Centre's commitment to create more spending power in the hands of people, Mr Mukherjee stressed on the growth of rural India which in turn will spurn growth, mainly of consumer durables. "Eradication of poverty is our primary focus. This in itself will become a solution to the slowdown problem," he added.

RBI may leave policy rates unchanged

RBI may leave policy rates unchanged
Business Standard, July 27, 2009, Page 1

Anindita Dey / Mumbai

Growth forecast may be raised to factor in improving monsoon, stimulus packages.

The Reserve Bank of India (RBI) might change its bias towards softening interest rates into a more cautious outlook but is expected to keep key policy rates unchanged in the monetary policy review on Tuesday.

At the same time, banking sources close to the development said the central bank could raise its growth target from 5-6 per cent to 6.5 per cent to accommodate the impact of an improving monsoon and the growth impetus provided through various fiscal and monetary stimulus packages earlier in the year.

The cautious outlook on interest rates is primarily to accommodate rising inflationary expectations in the economy.

“Around October-November, the base effect, which is keeping inflation rates down, will no longer apply. Therefore, rising food prices will also start showing on the wholesale price index. Besides, the consumer price index is highly inflated,” said the source.

This apart, a string of fiscal and monetary packages announced by the government and the RBI after the global credit crisis intensified last September are expected to result in high liquidity that could be inflationary in nature. “Thus, the inflation index will soon start going up and that needs to be incorporated in the outlook for interest rates in the coming days,” the sources added.

RBI could, however, raise rates towards the second half of the financial year, if not before, but is likely to maintain status quo for now, they added.

Since October, the RBI has lowered the cash reserve ratio (the proportion of deposits that banks set aside), 400 basis points to 5 per cent to increase liquidity in the system and encourage banks to lend more to companies.

Similarly, the repo rate (the rate at which RBI lends to banks), has been slashed 425 basis points to 4.75 per cent to signal a softening rate bias. The reverse repo rate, which is used to absorb surplus liquidity from the system, has been pared 175 basis points to 3.25 per cent.

Sources said the RBI has also decided to maintain status quo in the various stimulus measures announced since September 2008 to provide additional rupee as well as foreign exchange liquidity in the system.

The central bank had opened special windows to ensure that mutual funds, non-banking finance companies, small and medium enterprises and the banking system had enough funds at their disposal to deal with the higher demand locally after the credit crisis. But the windows have been largely unused for several weeks now, with banks consistently parking over

Rs 1,00,000 crore with RBI through the reverse repo window because of the low credit demand.

Land acquisition Bill on hold after Mamata puts her foot down

Land acquisition Bill on hold after Mamata puts her foot down
The Financial Express, July 25, 2009, Page 11

J P Yadav, New Delhi

With railway minister and Trinamool Congress chief Mamata Banerjee putting her foot down on the land acquisition Bill, even threatening to quit at the Cabinet meeting last night, the UPA government has decided to put the Land Acquisition (Amendment) Bill, 2007 and Rehabilitation and Resettlement Bill, 2007 on the backburner for now and look for a way out.

Sources in the government said that the Bills have been kept in abeyance and the move to introduce them during the current session of Parliament has been dropped. The Congress leadership is now looking for a way out given that Banerjee’s TMC is the second largest party in the UPA.

Banerjee on Friday stayed away from Parliament, skipping lunch with finance minister Pranab Mukherjee and others in the House. She sent her junior minister to the Rajya Sabha that she was scheduled to attend. In Lok Sabha too, only a couple of Trinamool members were seen, that too for a very brief period.

At the meeting of the Cabinet chaired by Prime Minister Manmohan Singh on Thursday, Banerjee was learnt to have rejected the twin Bills, making it clear that these failed to protect the interests of poor farmers. She was learnt to have told the Cabinet that she would be left with no option but oppose the Bills in Parliament.

With Banerjee not prepared to budge and even threatening to quit, the Cabinet was learnt to have decided to keep the Bills in abeyance till a solution was arrived at.

Word spread that Banerjee was boycotting Parliament but TMC MP Sudeep Bandopadhyaya denied any such move. He said they have differences over the land acquisition Bill but there was no question of separation. He denied reports that Banerjee had walked out of the Cabinet meeting and said she had lodged her dissent.

Bandopadhaya said they wanted the Bills to be placed before a Standing Committee or Joint Parliamentary Board. He said public opinion should be gathered. “We are firmly against any forcible acquisition of farmer land. We want industries but not at the cost of poor farmers,” he said.

According to TMC sources, Banerjee was learnt to be against the very core of the proposed Bill that talks about a private developer:state ratio of 70:30. The Bill proposes that the state would acquire 30% of the land only after private developers buy 70% of the land directly from farmers.

Banerjee wants that the state in no way should get involved in the acquisition process and that 100% of the land should directly be purchased by private developers. She also insists that the Bill should contain penal provision to check the use of money or muscle power by developers to acquire land.

The previous UPA government got the Bill passed in the last session of the 14th Lok Sabha before the elections. But the Bill lapsed and must be re-introduced. The Congress had claimed that the amended Bill was historic in the sense that it ensured rehabilitation before acquisition and protected interests of farmers and the tribals. The proposed Bill was prepared setting aside many important and unanimous recommendations of a Parliamentary Standing Committee.

U.K. Economy Shrank by 0.8% in the Second Quarter

U.K. Economy Shrank by 0.8% in the Second Quarter
The Financial Express, July 25, 2009, Page 20

July 24 (Bloomberg) -- The U.K. economy shrank more than twice as much as economists forecast in the second quarter as a record annual slump in construction, banking and business services kept Britain mired in the recession.

Gross domestic product contracted 0.8 percent from the first quarter, the Office for National Statistics said today in London. Economists predicted a 0.3 percent drop, according to the median of 32 forecasts in a Bloomberg News survey. From a year earlier, the economy shrank 5.6 percent, the most since records began in 1955.

Prime Minister Gordon Brown’s Labour Party trails the opposition Conservatives in polls less than a year before an election as the recession drives up unemployment. Bank of England policy maker Andrew Sentance said yesterday that the British economy may start to pick up in the second half of 2009.

“It’s a very sizeable recession indeed,” said George Buckley, chief U.K. economist at Deutsche Bank AG in London. “I think we’ve seen the worst, but what will the post-recession environment look like? There is a risk in the medium term that growth will be weaker than we’re used to.”

The pound dropped as much as 0.5 percent against the dollar after the report.

India Inc sees recovery, but concerned on rates

India Inc sees recovery, but concerned on rates
The Financial Express, July 27, 2009, Page 5

fe Bureau, Mumbai

India Inc, including bankers who gathered at the India's Best Banks Awards ceremony on Saturday, are confident about the revival of economic growth without any further stimulus packages but concerned about the possible rate hike in the future.

Speaking exclusively to FE, Naina Lal Kidwai, general manager & country head, HSBC - India, said, "Yes, the economy is showing signs of revival. Various sectors like cement, steel, auto, infrastructure have started showing growth. Our banking system continues to remain strong. A lot of money from banks is getting pumped into sectors like infrastructure and power." However, sectors like SMEs and textile are facing the pain and will need some support.

"We will have to see how fiscal deficit is managed differently. The government is doing a great job in managing the economy. It is also focussing highly on spending.

We will now have to see how credit growth picks up. As of now, liquidity looks intact," she added.

However, when credit off-take starts to pick up, which is expected in another six to eight months' time, the economy will see interest rates start rising, she cautioned.

We may even see a squeeze in liquidity then. Today, we do not think there would be a change in the cash reserve ratio (CRR) or other interest rates. Hence, we don't think there is scope for lending and deposit rates to go further down. Till the time credit growth does not pick up, interest rates will not go up,'' she explained.

The banking industry will also see a lot of banks raising capital during the second half of the year."

Neeraj Swaroop, regional chief executive, CEO, India & South Asia, Standard Chartered Bank said, "There are some positive signals in the economy showing signs of recovery. However, it will still take months to be clear. The government is facing a tough challenge on the current fiscal deficit front and in balancing out the extra liquidity."

Sectors like exports and infrastructure, which have been impacted, will take time to recover, he pointed out. "We don't think there is a need for another stimulus package. The complete effect of the previous stimulus is yet to be seen. On the interest rate front, it is still tough to say if there would be any step taken by the regulator," he observed.

Vishwavir Ahuja, MD & CEO, Bank of America (India), said, "Our economy is still in good shape, as our fundamentals remain intact. There continues to be some triggers for faster growth."

The monetary and fiscal measures taken by the government have proven successful. The banking system looks healthy with the savings and demographics in the economy, he said.

"We do not need another stimulus as our economy is well poised for now. Interest rates will start moving upwards as the economy gets on a faster track." he pointed out.

MV Nair, chairman & managing director, Union Bank of India said, "Interest rates have bottomed out and will remain stable for now. Liquidity is ample in the system. There is no scope for lending rates to go further down. Demand for housing is coming back and there are projects in the pipeline. We anticipate a 20% growth in credit by the end of this year."

Realtors hop on to Street to raise $2.5 b

Realtors hop on to Street to raise $2.5 b
The Economic Times, July 27, 2009, Page 1

Sachin Dave MUMBAI

THE builders are back on Dalal Street after a gap of more than a year. At least six real estate firms plan to mop up more than $2.5 billion from the capital markets by December, 18 months after poor response forced Emaar MGF to scrap its Rs 6,500-crore maiden share issue a day after it opened in February last year.

Emaar MGF, Sahara Prime City, Godrej Properties, Lodha Developers, Nitesh Estates and Sriram Properties will all hit the capital markets this year, signalling that the worst may be over for an industry that virtually cratered in the global economic storm last year.

There are two reasons for this rush, said international property consultants Jones Lang LaSalle Meghraj (JLLM) chairman Anuj Puri. “One, the market is looking comparatively better today, and two, most of these companies are in serious need of liquidity,” he said.

With market conditions still tight, it will not be easy for these issuers to demand substantial premium from investors, say experts. “Looking at the present volatile market, it would be really difficult to predict the premium. But if we go by the recent response to IPOs, these real estate companies could debut at a 5-10% premium,” said an industry tracker who did not wish to be named.

Five companies have so far raised Rs 3,160 crore from the capital markets this fiscal, according to market research firm Prime Database.

Godrej Properties to sell 10%

THE last to be listed, Mahindra Holidays and Resorts, debuted on BSE 7% higher than its issue price.

Godrej Properties, the real estate arm of the Godrej Group, plans to sell around 10% through its maiden public issue, a person close to the development said. Before that, the company will place a 3.5% equity with select institutions.

The initial public offer (IPO) is expected to fetch the company anywhere between Rs 450 crore and Rs 600 crore, said the person on condition of anonymity. It will use the proceeds for building low-cost housing. ICICI Securities and Kotak Mahindra Capital are the merchant bankers to the issue.

Godrej Properties recently announced plans to spend Rs 5,000 crore on township projects in Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, West Bengal and Delhi that would offer homes at less than Rs 20 lakh.

Mumbai-based Lodha Developers, which has just signed the largest property deal of the year so far to acquire Finlay Mills’ 10.3-acre property in central Mumbai for Rs 710 crore, plans to raise Rs 3,000 crore through an IPO. Part of the proceeds will be used to fund the Finlay Mills deal, which calls for full payment within three months. Lodha, which has been going through a financially tough time, will use the money to retire debts and fund ongoing projects. It is also planning to enter real estate markets other than Mumbai, said a top official, requesting not to be named.

Emaar MGF, a joint venture between Dubai-based Emaar Properties and MGF Development, is looking to raise Rs 4,000 crore this year. Kotak Mahindra Capital has been mandated to manage the issue. According to market analysts, like many other real estate firms, Emaar MGF will have to divert a major chunk of the IPO proceeds to repay debts. In May, a contractor alleged that the company was yet to pay around Rs 200 crore to a contractor.

Sahara Prime City, the real estate arm of the Sahara Group, is expected to mop up $1 billion. A Sahara Group official said there was a plan to go public but refused to confirm the size of the issue. Industry sources said the company may invest part of the proceeds to retire its existing debts. NRI investor C Sivasankaran recently picked up a 49% stake in Sahara’s Aamby Valley project. The size of the transaction could not be verified.

Bangalore-based Nitesh Estates is planning to tap the capital markets to build its land bank and enter the western Indian market, particularly Mumbai, an official said. While the size of the issue could not be ascertained, a banker said it would hit the markets by the end of August.

ET also recently reported that Chennai-based Shriram Properties, part of the Chennai-headquartered diversified Shriram Group, has appointed Macquarie and Enam as advisors for its proposed Rs 500-700 crore initial public offering.

Prior to the elections, the real estate sector was in big trouble with property prices at an all-time low. While prices had dropped up to 40%, buyers were not returning to the market in large numbers as the global financial crisis was affecting the Indian economy as well. Developers were panicking and even the biggest names in the sector such as DLF and Unitech had to stop work at many sites and sell their non-core assets to deal with the fund crunch. The share prices of realty firms had hit rock bottom before the election results, but started picking up after that. In fact, the realty index has been outperforming most other sector-specific indices in the past several weeks.

Govt weighs 3-yr lock-in on FDI in real estate

Govt weighs 3-yr lock-in on FDI in real estate
The Economic Times, July 27, 2009, Page 9

Our Bureau NEW DELHI

THE government is weighing the impact of a possible three-year ban on stake sale by foreign investors in real estate projects, a decision that could affect future capital inflows into the sector.

Real estate developers had recently urged the government to reinterpret a provision in the foreign direct investment guidelines, so as to stop overseas investors from withdrawing their funds, beyond the minimum capital of $5 million, before three years of the initial investment.

This, they said, will help them tide over the current liquidity crisis. However, the commerce ministry is concerned that such a measure could be counter-productive.

The government wants to keep the foreign investment policy as flexible as possible since the country now needs foreign capital to sustain the growth momentum. For any foreign investor, the exit strategy is as important as the entry strategy. If it is difficult to withdraw capital and redeploy it in another sector, then foreign investors could become reluctant to invest in real estate.

“We examined the proposal, but have not taken any decision and status quo continues. However, we cannot rule out any change in the future,” said an official, who asked not to be named, considering the sensitivity of the subject. The law says that in a cross-border JV in real estate, the foreign partner should bring in a minimum capital of $5 million. The funds would have to be brought in within six months of commencement of business.

Global IT contracts dip 22% in H1

Global IT contracts dip 22% in H1
Business Standard, July27, 2009, Page 4

Shivani Shinde / Mumbai

Reduction in mega deals in Europe; demand for IT outsourcing remains stable: Study.

Compared with the first six months (January-June) of 2008, which saw record levels of outsourcing activity, the information technology industry awarded a total contract value (TCV) of just $20.5 billion in the first half of 2009 which is 22 per cent lower, year-on-year (y-o-y).

The decline was primarily due to a reduction in mega-deals in Europe, as well as lower spending globally on business process outsourcing (BPO), states a new report from TPI, a research and advisory firm.

For the calendar year 2008, the industry had signed $90 billion worth of contracts. Moreover, the annualised contract value (ACV) — TCV divided by the duration of the contract — was the largest ever in 2008, at $17 billion. For the first half of 2009, however, the ACV is 28 per cent lower y-o-y.

In TPI’s view, the IT industry will not be able, to match last year’s figures (both TCV and ACV) since its performance during the second half of this year will have to then be phenomenal, unlikely in the current global economic scenario. The full-year TCV could fall below $80 billion this calendar year, states TPI. However, newly-signed commercial outsourcing contracts also suggest the outsourcing market has entered into a period of sustained activity, states the report. The study is based on the TPI index, which measures contracts valued at slightly over $25 million (around Rs 120 crore).

“The first half of 2008 was extremely strong for the outsourcing industry, which makes a year-over-year comparison tough. Nonetheless, recently we have seen some very early signs of stabilisation in ITO (information technology outsourcing) markets, especially in the United States, which gives us some encouragement that we may be seeing a bottom to the current slump,” qualifies Mark Mayo, Partner and President, TPI Global Resources Management.

On the bright side, demand for IT outsourcing (ITO) remained stable, both sequentially and year-over-year, in the Americas and the Asia Pacific. In addition, several industry verticals, including diversified financials, transportation, retail and telecom, increased their adoption of outsourcing during the first half of 2009.

For instance, the 26 contracts awarded by transportation companies in the first half of 2009, with buyers in Europe, West Asia and Africa leading the way, represented 44 percent year-over-year growth. In telecom, the number of contracts did not change substantially, but TCV and ACV each doubled, year-over-year. Those four sectors together account for 37 percent of the number of contracts and 47 percent of TCV awarded this year.

The ITO market has benefitted from strength in network services, which accounted for half the mega-deals and mega-relationships so far in 2009, as well as in the Americas and Asia Pacific. Compared to the first half of last year, the TCV of ITO awards is up by six per cent in the Americas.

The major Indian service providers like Tata Consultancy Services, Infosys Technologies, Wipro and HCL Technologies continue to figure among the top 10 players in the Application Development and Maintenance (ADM) space.

Most mid-size cos plan to hike IT spend: Study

Most mid-size cos plan to hike IT spend: Study
The Hindu Business Line, July 25, 2009, Page 4

Our Bureau, Bangalore

According to a global study released by IBM, even in tough economic conditions, over 50 per cent of Indian mid-market business decision makers (including COOs, CFOs, CIOs etc,) expect their IT budget to increase in 2009 compared with last year.

According to the survey: “The majority of Indian companies surveyed cited supply chain management (SCM), information management and security management as critical business priorities for improving performance and efficiency.

Most mid-size companies also recognize that a go-it-alone strategy may hinder their chances for success, and finding strategic IT partners who can collaborate with them to realise their vision is the key for success.”

“Even in today’s unsettled global economy, mid-size companies continue to innovate and grow through technology investments in India. This is especially true in growth markets where IT budgets have been left largely intact.”

This is based on a study of 1,879 business and IT executives at companies with 100 to 1,000 employees across industries and in 17 countries including India, Australia, Brazil, Canada, China, France, Italy, Malaysia, Mexico, Russia, UK, and US.

“Mid-size companies in India are investing in the future – making changes and taking risks to survive, compete – and thrive,” said Mr Ramesh Narasimhan, Director, General Business, IBM India/South Asia.

Skilled in-house

The study said, “Some of the common barriers to successful IT implementation at growing organisations are an inability to implement and lack of required skills in-house. Study findings indicate that many mid-size firms work with IT providers and consultants to overcome these barriers.”

About 70 per cent said that they prefer to partner with an IT company that has “expertise in their business to help them work smarter”, while 67 per cent look for partners that can provide the highest quality IT infrastructure solutions.

Companies sublet space, realtors face the heat

Companies sublet space, realtors face the heat
Business Standard, July 26, 2009, Page 3

Neeraj Thakur / New Delhi

Rentals may go down by 10% in coming quarters: Cushman & Wakefield.

Real estate developers, who are facing oversupply and lack of demand, are now finding new competitors. Many medium to large companies, which had planned aggressive expansion during the boom of 2007 and taken large commercial and retail space on lease from these developers, are now subleasing these assets, creating more supply in the market.

“The subleasing activity by corporates will add pressure on some of the largest developers of the country, especially in Gurgaon and Noida, as there is already a huge demand-supply mismatch,” Kaustav Roy, executive director of real estate consultants Cushman & Wakefield, said. “In the coming quarters, we expect a further reduction in rentals by 5-10 per cent,” he added. Both commercial and retail markets for real estate have witnessed fresh supply in almost all major cities. The National Capital Region (NCR) and Hyderabad witnessed supply of over 300,000 sq ft each from these non-real estate players between January-June 2009.

According to Cushman & Wakefield data, in the first two quarters of 2009, the NCR has seen supply of 305,000 sq ft of subleased space, while Hyderabad has seen 383,000 sq ft of subleased commercial space. In Bangalore, 58,200 sq ft of subleased commercial space was made available.

These corporates had bought space to expand aggressively, assuming that the high-growth trajectory prevailing in 2007 would continue in the foreseeable future. Following the sharp change in the business environment in the aftermath of the global financial meltdown, these corporates are now in a bind. They are now forced to lease out a part of their space, as they cannot get out of lease agreements in the next 12-18 months due to lock-in periods.

“A lot of developers had signed agreements giving companies the right to sublease their space in future. Those companies are using this clause during this downturn to save costs,” Naveen Raheja, CMD of Raheja Developers, said.

Since this well-furnished commercial space is available at a marginal premium, its demand is better than the unfurnished space offered by developers. Companies are offering their space at an average Rs 20 extra on existing rentals.

“The subleased space is well furnished and the companies are quoting very competitive rentals for their space. If the buyer gets an already furnished space at a marginally higher price, naturally we will have to reduce our prices to sell our space in this subdued market,” an executive of a leading real estate company said.

House Proud: Elders refuse to buy reverse mortgage

House Proud: Elders refuse to buy reverse mortgage
The Economic Times, July 26, 2009, Page 1

Real estate price correction, absence of clear guidance on legal complications, inadequate marketing hit plan’s takeoff

Neha Dewan & Anand Rawani NEW DELHI

REVERSE mortgage, a popular model allowing senior citizens to take money out of their homes, is failing to find an abode in India. Senior bank officials that SundayET spoke with have confirmed that the product has failed to find takers during the last two and half years of its existence in India.

Till now, less than 500 applicants have availed this loan in India since its inception in 2007, a senior bank official, who did not wish to be identified, said.

The reasons for the model not taking off in India are manifold. From an emotional attachment with one’s house to real estate price correction; from an absence of clear guidance against legal complications to inadequate marketing, the plan has been unable to meet the expectations of financial institutions.

Reverse mortgage is a plan through which senior citizens can avail loans from either banks or other financial institutions by mortgaging one’s home.

If a senior owns a house and has a mortgage on the house, he might get a reverse mortgage to pay off the existing loan and then have some money left over to take care of his expenses for the rest of his life. The homeowner could get that as a lump sum or a line of credit, and wouldn’t have to pay it back until he moved or died and the house was sold. The banks can sell off the property to realise the loan amount. However, there is a provision that the legal heirs can acquire the property back by paying off the loan to the bank.

Dewan Housing, which is one of the largest housing finance companies, has been able to sell only 4-5 reverse mortgage loans during the last two years. Two large financial institutions, HDFC, which incidentally is one of the largest home loan lenders in the country, and Kotak Mahindra do not have reverse mortgage in their portfolios.

In fact, several other players in the segment are also facing difficulties in selling reverse mortgage products. Says Sujan Sinha, senior V-P and head of retail liabilities, Axis Bank, “The product has not done well. In India, you can count the number of cases of reverse mortgage on your finger tips.”

There are some very basic reasons that have worked against this product which has taken off rather well in international markets. The psyche of Indians does not make them comfortable with the idea of selling their home. The tradition of passing down one’s property over generations is an age-old one and is unlikely to change soon. Inheritance of property too is a problem. According to Kamlesh Rao, senior V-P at Kotak Mahindra Bank, the problem lies in the fact that in India the son inherits the property of his father but is reluctant to inherit the loan amount.

“Such a model may not work in our country due to its very nature. One’s shelter is not meant to be sold,” reiterates Mr Sinha.

No protection for lending cos

ANOTHER senior bank official said that there are several reasons behind the failure of this product. “There is no clarity on possession of the property. If a person goes for reverse mortgage at the age of 60 for 15 years but he survives, the financial institution does not have a clear guidance on how to acquire that home. Also from the client’s side, it will be difficult to pay off the loan if he wishes to live in the same house.”

He further added that there is no protection for lending institutions in case of legal complications. In more developed nations, it is the insurance companies that come to the rescue of finical institutions.

However, not all have written it off. K Raghuraman, director of Andhra Bank, says the product has suffered due to lack of a sound marketing strategy. “This is a fantastic product. This would be the best pension plan. The interesting part is that the property is not sold today but the client gets today’s valuation,” he says.