Form two companies

Really and seriously

Really was launched in 2009 amd seriously in 2010. They have not gone public yet.
1.deals in construction of building both corporate and private and the other deal in
pre fab material. Competition is intense, revenue streams are drying up and cost
pressure is mounting . the only way to exit the industry is bankrupts. With new
industries entering the industry with advanced technologies today is an important
day. The agenda for todays meeting 1. Introspect who we are(prepare a company
profile) assumptions are acceptable but only within Indian industry context). 2.
Potential of the industry(find out the leading players and why they are on the top, is
it possible to survive what should we do to survive. What do to survive .what
potential pro and cons do you think are of such probabilitites.


















Company Profile
Name Really Developers


Really developers, one of maharashtras most prestigious construction firm, is a
mumbai based group, and has been in real estate development for more than 5 years
have earned a reputation of being reliable and trustworthy people known for quality
construction and on time possession. Our residential and commercial projects have
always set a new trend by catering to the changing need of our client.
When it comes to the best Residential or Commercial project in town, Really
developers are always on the front row. Giving shape to the various prestigious
projects at the prominent places in the town, our name symbolizes quality,
commitment and timely Services. When every project bears the brand name
"Really we always give it our best. So, those who are looking for a prime business
place or a luxurious residence, we have the project catering to every need. One of
the recent projects taken up and completed by the company is Skyline Tripoli Oasis
housing Society in Ghatkopar.
We follow strict construction quality norms and keep strict supervision to achieve
the best quality and construct building which are known for their superior
construction quality. The vision of the group is to continuously strive to achieve
better quality, build buildings of superior quality and be fair in the dealings. We
have a big family of satisfied customers who have been our inspirational source; we
have executed several projects in Mumbai.




Mission
To provide high quality infrastructure to corporates and private

To build cost efficient and trend setting infrastructure

To develop into one of the best managed company and to set benchmark in the
construction industry.
Vision
The vision of Really Developers is to achieve the highest possible standards of the
real estate industry and be sustainable by safeguarding the environment. We pursue
clearly defined strategies to advance our market leadership.
Core values
No compromise in quality with excellence and finesse.
Goals
Creating Green Buildings (Carbon neutral buildings), extending to eco-sensitive
projects.
Financial considerations
The companys operating budget is around 80 crores with 10 partners
20% partnership
1.year 12 13 14 15 P&L account
2.type of company
3. critical
Location (where and why,RBI guidelines, ppl buying lands or not)
Time of Completion (beginning to end), when do u sell?
Cost (industry avg of mark up, how much do we paty for each sq feet)
Quality (
Overrun (cost & Time)
Municipal Laws (road layout ,plans, construction material(time overrun, where to
store )l)

4.
3 crores in inventory includes cements purchased, materials on-site
10 crores includes vehicles and machineries
2 crores includes leased out equipments we have
69 crore includes the value of the land (pre construction)
We have 50 crores in Bank loan
And 1 crore to be paid to the suppliers
Tell about yourself (Roles)



Industry size and Growth of Construction Industry
India's Construction industry has grown at a Compounded Annual Growth Rate (CAGR) of about 11.1%
over the last eight years on the back of massive infrastructure investment and rapid rise in housing demand.
Figure 1: I ndustry size and growth of Construction GDP at constant prices (Rs. billion)

2,500 2,263
2,000
11.1%


1,500
1,084
1,000
500
-
2005 2006 2007 2008 2009 2010 2011 2013

Source: Economic Survey 2005-13 and IMaCS analysis
Industry Segmentation
Construction sector can be broadly classified into 2 sub-segments:


1) Real estate (Residential, Commercial/Corporate, Industrial and Special Economic Zones (SEZs))

2) Infrastructure (Transportation, Urban development, Utilities)

Figure 2: I ndian Construction I ndustry Landscape

Construction Industry




Real Estate Infrastructure




Residential Utilities Urban Infrastructure Transportation



Commercial

Power Railways



Special Irrigation Civil Aviation


Economic




Zones



Roadways







Ports

Source: IMaCS analysis
The Real Estate segment contributes around 24% to the Construction GDP of India while Infrastructure
segment contributes around 76%.

Figure 3: Share of Real Estate and Construction by GDP contribution




Rs 504

Billion


Rs 1,596
24%


Billion

76%


Real Estate

Infrastructure


Source: Economic Survey 2005-13, IMaCS analysis

1.3. Real Estate Sector


In terms of GDP contribution, Real Estate sector is estimated at around Rs. 504 billion in 2007-08. The
market size of the Indian real estate sector is estimated to be around Rs. 2,643 billion in 2007-08. The
sector has been growing at a CAGR of 12%. It is constituted of the Residential, Commercial and real estate
activities of Special Economic Zones.

Figure 4: Real Estate Segments


Commercial

/ Retail
SEZ
9%

9%






Residential
82%




Source: I-Sec Research, Ministry of Commerce and Industry, IMaCS analysis


1.3.1. Residential


At around Rs. 2,171 billion, the housing sector is estimated to grow at 12% in the long term. Demand for
housing is estimated to be around 4.8 million houses per year over the Eleventh Five Year Plan period. In
addition to the need for new housing tenements, the demand is also likely to be fuelled by the housing
shortages already prevalent in several states. The shortage of housing across several states, as illustrated in
the graph below, amounts to about 25 million houses in the period of the 12Th Five Year Plan.



Figure 5: Housing Shortage by State over the Eleventh Five Year Plan (million houses (% of share of
various states)

Andhara

Pradesh
Gujarat


1.95 1.66

8% 7%
Karnataka Other States

Delhi
5.11 1.63

21% 7%

1.13
Madhya
4%


Pradesh

West Bengal
Maharastra 1.29


3.72 5%

2.04



15%

8%



Uttar Pradesh Tamil Nadu Rajasthan

2.38 2.82 1

10% 11% 4%


Source: Planning Commission Working Group on Urban Housing, 2012


. Commercial/Retail Construction


The rapid growth of the Indian economy has had a significant impact on the demand for commercial
property to meet the needs of business, by way of offices, warehouses, hotels and retail shopping centres.
Growth in commercial office space requirement is led by the burgeoning outsourcing and information
technology (IT) industry and organised retail. For example, IT and ITES alone is estimated to require 150
million square feet across urban India by 2013. Similarly, the organised retail industry is likely to require
an additional 220 million square feet by 2013
4
.







Figure 6: Size of Commercial/Retail Construction









Retail
Office

Rs 113 billion

Rs 126 billion
47%

53%











Source: I-Sec Research, Ministry of Commerce and Industry, IMaCS Analysis

1.4. Infrastructure

With the government's focus on infrastructure development along with the active participation of the
private sector, this segment is growing rapidly. The Power, Irrigation, Transportation including Roadways,
Railways, Airports and Ports, Urban Development and Communications sectors have witnessed
investments of Rs. 6.9 trillion over 2013 and will witness around Rs. 14.8 trillion in2015
Distribution of Outlay in I nfrastructure Segments in 2014and 2015 YearPlans

1,600,000

Rs 953 billion




1,400,000




1,200,000

1,000,000

Rs 5.7 trillion

Communications




Transportation



800,000

Rs 1.2 trillion

Urban Development




600,000
Rs 989 billion
Rs 2.1 trillion

Irrigation




Power


Rs 2.2 trillion




400,000
Rs 382 billion



200,000
Rs 1.03 trillion
Rs 4.8 trillion





Rs 2.3 trillion

-


14th FYP 15th FYP






Source: Economic Survey 20012-13

Major Players

The first professional consultancy company,
National Industrial Development Corporation (NIDC), was set up in the public sector in 1954.
Subsequently, many architectural, design engineering and construction companies were set up in the public
sector
Indian Railways Construction Limited (IRCON)
National Buildings Construction Corporation (NBCC),
Rail India Transportation and Engineering Services (RITES),
Engineers India Limited (EIL), etc.)
private sector
(M N Dastur and Co., Hindustan Construction Company (HCC) etc.).

The Indian Construction industry comprises of about 200 firms in the corporate sector. In addition to these
firms, there are about 1,20,000 class-A contractors registered with various government construction bodies.
There are thousands of small contractors, which compete for small jobs or work as sub-contractors of prime
or other contractors.
The major players in the construction industry are:


Companies such as L&T, Unitech, GMR Infrastructure, HCC, Gammon, Jaypee group, Jaiprakash
associates, BL Kashyap etc. which undertake large infrastructure projects.
Companies such as IVRCL, Nagarjuna, L&T, DLF, Omaxe etc. involved in the construction of
flyovers, pipelines, apartments and housing/office spaces.

Companies such as DLF, Purvankara, Raheja and others are engaged in the construction of
residential and office space.



Skill requirements and skill gaps common to the Building, Construction and Real Estate Sector

Level Skills required Skill gaps



Ability to manage costs, quality and ensure Inadequate knowledge of

on-time delivery of project planning and scheduling

Ability to highlight issues, if any, to the software

senior management and ensure their

resolution so as not to compromise on cost, Inadequate project

quality and time management skills

Sufficient knowledge of the local language to


Project
be able to communicate with contractors and



Manager (of
labourers Difficulty in controlling time



3 to 4 years
Ability to maintain project site documents overrun and cost overrun



experience)
Basic understanding of hydraulics electrical


knowledge and piping Poor project management

Ability to effectively manage contractors and and resource estimation skills

ensure that contract specifications are being

met Insufficient orientation

Ability to understand technical drawings and towards project costing,

thus the project design efficient inventory

Ability to ensure compliance to construction management and adhering to

approvals and laws and understand legal deadlines
















Level Skills required Skill gaps



issues associated with the industry

Basic knowledge of construction equipment Lack of communication and

Strong task orientation, trouble shooting to team building skills

resolve issues, high integrity and energy

levels Insufficient ability to manage

Basic computer skills and ability to work on multiple contractors and

MS Excel resolve conflicts

Strong networking and liasoning skills

Ability to manage inventory and ensure

appropriate usage

Ability to plan and effectively deploy the

available resources (man, machine, material)

Ability to ensure that safety and health norms

are adhered to

Strong oral and written communication skills

to be able to communicate effectively with

Head Office, contractors, architects, laborers

etc.

Ability to control the finances of the project,

including expenditure monitoring and

reporting

Advanced knowledge on project costing and

project management tools like PERT and

CPM includes good computer skills

Ability to articulate project objectives to

team members, coordinate and motivate the

site team


Ability to communicate and implement safe Civil engineers hired for this

practices, such as ensuring that a net is laid role usually do not have


Engineers /
while working in a pit with loose soil sufficient ability to develop


Ability to ensure minimal machine downtime and comply to a Preventive



Supervisors


and avoid breakdowns say, for batching Maintenance schedule



plants, transit mixers, etc.

Ability to appropriately allocate work to Inadequate orientation to

semi-skilled and unskilled workmen develop and adhere to safety








Level Skills required Skill gaps

Ability to effectively communicate with norms at construction site
semi-skilled and unskilled workmen and
articulate project objectives to all Lack of communication and
Ability to understand and take instructions team management skills
from project managers
Ability to supervise and ensure quality of Incomplete knowledge of
work tendering processes
Ability to maintain a high level of integrity
Ability to manage skilled and unskilled Insufficient writing skills in
workmen and resolve disputes as and when English and documentation
they arise skills
Ability to create a sense of trust among the
semi-skilled and unskilled workmen so that Incomplete understanding of
they approach the engineer / supervisor in risks associated with a
case of any issues project such as time/cost
Ability to understand, speak, and know the over-runs as well as legal
local language and also understand its aspects
nuances
Knowledge of construction equipment and Lack of coordination skills
their functions and the ability to ensure that
the equipment is maintained as per standards Poor time management skills
Good written and oral communication skills
Understanding of legal issues associated with Poor planning and
the industry scheduling skills, including
Ability to manage conflicts and stress skills for estimating
Overall execution and management of the manpower and material
project allotted Insufficient orientation
Ability to schedule preventive maintenance towards project costing,
activities and undertake breakdown functionality of equipment
maintenance and their maintenance
Insufficient ability to resolve
conflicts
Few students willingly take
up Civil Engineering courses
at the diploma and degree




Level Skills required Skill gaps



levels and it is thus difficult

to fill up these seats with

good students many

students who take up this

course do so because they do

not get admission to other

preferred courses hence the

quality of students who pass

out from the degree and

diploma courses has room for

improvement

Engineers are required to be

on-site there is resistance to

travelling and staying in

remote locations

Many do not know /

understand the native

language of skilled /

unskilled workmen need to

be deputed on a project based

on language skills

Inadequate planning skills

Inadequate practical industry

exposure


Ability to coordinate with unskilled workmen Inadequate knowledge of

Ability to operate key equipment such as construction specific areas -

cranes, especially tower crane operations, such as lining, leveling, and

and also mechanisms for loading and finishing skills in carpentry


Skilled
unloading of cranes Availability of these



workmen
Ability to work at heights (for high rise personnel is an issue - it


buildings, especially in the case of crane may be necessary to import

operators) people with relevant skills

Ability to deliver quality output from Middle East/South East

Need to be adept in their own trades e.g. Asian countries/ China, etc.

plastering, painting, plumbing, etc. Lack of knowledge of basic




Level Skills required Skill gaps



Knowledge of construction specific areas machine operation

such as while carpentry is a generic course appropriate operation of

which is taught, there is a need for carpenters cranes lifting and placing

engaged in the Construction industry to be

aware of lining, leveling, and finishing skills Inadequate ability to

Need to understand machine operations and understand instructions of

basic machine troubleshooting supervisors/engineers.

Ability to comply with safety and quality

measures

Need to have basic knowledge of

construction engineering


Ability to perform the operations of Very little safety orientation

excavation, carrying, cutting, helping of

mason, mixing, spreading of stones, packing Inadequate workplace skills

Ability to be involved in and perform manual discipline, cleanliness, etc.

labour intensive work thus need to be

medically fit Inability to follow simple

Unskilled
Need to have an orientation towards safety instructions

requirements and basic workplace practices


workmen

(reporting to work on time, etc.) Low job loyalty - very prone


Need to be able to move material as required to leaving one construction

using carts / manually, and thus also need company and joining another

to be physically strong

Ability to take instructions from skilled

workmen / supervisors / engineers and

execute them appropriately

Material preparation / Concrete mixing


Source: Primary research and IMaCS analysis


Skill requirements and gaps specific to individual segments over and above what is common across
these two segments are detailed below:











2.4.2. Skill gaps common to the Real Estate

Table 7: Skill gaps specific to the Real Estate segment

Function Level Skills required Skill gaps

Land Experienced Ability to liaison with land owners, Civil engineers hired
acquisition and personnel government bodies, village for this role usually
land bank authorities, property dealers, etc. to lack knowledge about
creation identify sources of land relevant government
Ability to study legal papers and procedures and
check the property accordingly clearances
Ability to understand and comply
with local Government procedures Lack of aptitude to
related to land procurement write good basic
Strong liaisoning and negotiation investment proposals
skills i.e. the ability to maintain in English language
good relations with local and
controlling authorities Personnel are not very
Strong written and oral articulate while
communication skills to be able to liaisoning .
interact with different land owners
(private/Government)
Ability to understand overall
dimensions of land, the
topography, etc. including aspects
like requirement for
roads/pathways, pavements,
resulting wastage etc
Purchase of land after rate
negotiation

Entry Level Basic legal knowledge Inadequate legal
personnel Basic ability to understand knowledge
contracts and agreements
Ability to understand suitability of Inadequate networking
land for construction purposes, i.e. skills
the ability to assess the land on
technical parameters such as




Function Level Skills required Skill gaps

available supply of water,
electricity, access by road for
delivering construction material,
etc.
Ability to maintain good relations
with local and controlling
authorities
Basic understanding of the real
estate market in terms of drivers of
land prices, means of acquisition,
etc.

Project Experienced Ability to define the project theme Inadequate ability to
conceptualisati- personnel and key features, narrow in on the plan out large scale
on, design, target set of customers, projects including
planning and understand/perceive their high rises, large
marketing requirements, design the layout housing complexes,
(including accordingly keeping in mind infrastructure projects.
seeking functionality, architectural and
approvals) aesthetic aspects and frame the
marketing and sales strategy
Appropriate selection of land from
the land bank for the project under
consideration for example, a land
closer to the main centre of a city
may be selected for a mall
Ability to liaison with architects
(in case architects are sub-
contracted by the company)
Ability to undertake the detailed
design and engineering and
shortlist and select vendors for
borewells, earth filling,
construction, development works,
landscaping, horticulture, etc.
Ability to correctly estimate the




Function Level Skills required Skill gaps

module-wise/function-wise costs
and hence correctly estimate the
total project cost
Ability to estimate correct project
timelines
Ability to decide strategic
parameters such as whether the
property will be leased/whether it
will be an outright sale, what the
optimum mix of lease v/s sale will
be for commercial properties
Ability to market the property with
future owners/tenants through ads,
hoardings, tie-ups with property
dealers, corporate tie-ups, etc.
Knowledge of property markets
and relevant government
procedures and clearances
Ability to initiate technical and
legal formalities with statutory
authorities for sanctions so as to
ensure uninterrupted progress of
work when project execution
starts, i.e., coordinate and seek
clearances/ approvals from the
required urban development
authorities, Government bodies,
Pollution Control Board, and other
stakeholders as deemed necessary
Ability to understand legal
contracts and sign deals with
contractors

Entry Level In-depth architectural Inadequate knowledge
personnel knowledge of Project Management
In-depth civil / construction skills and Project


Human Resource and Skill Requirements in Building, Construction Industry and Real Estate Services


Function Level Skills required Skill gaps



knowledge Management software

Project management skills, like MS Project /

including the use of project Prima Vera, etc.

management software

Knowledge of costing Lack of practical

Knowledge of commercials knowledge of

taxes, duties etc. construction

Ability to understand survey technologies /

techniques methodologies e.g.


Ability to prepare working
plastering, piling,



drawings,
water proofing, use of



Knowledge of lab testing
machines,


understanding of pre-


methodologies, safety procedures



fab structures and dos


and ISO requirements for Health,



and dont of


Safety & Environment



construction



Lack of exposure to

survey techniques, Lab

testing methodologies,

Quality Control and

Quality Assurance

Lack of knowledge of

safety procedures and

ISO requirements for

Health, Safety &

Environment



Facility Experienced General administration and Incomplete

Management personnel logistics, after the facility has been understanding of

occupied, including house keeping, maintenance services

security, front office, power back

up, etc Inadequate customer

Ability to conduct regular orientation and

preventive maintenance and as- interaction skills










Function Level Skills required Skill gaps

required breakdown maintenance
of civil, electrical and mechanical Inadequate
installations understanding of AMC
Knowledge and proficiency in
handling maintenance of services Inadequate
like plumbing, elevators, documentation skills
auditorium services, fire fighting
and associated services Insufficient of
Ensuring availability of utilities managing people
such as water, electricity, etc. involved in delivering
Ability to negotiate with and services
manage vendors and contractors,
including ensuring their payments
Ability to have an orientation
towards customer service

Entry Level Ability to undertake operations and Inadequate orientation
personnel maintenance activities towards customer
Coordination with multiple service
agencies and vendors
Ability to mobilize resources as Inadequate ability to
and when required multitask and
Ability to handle complaints from coordinate with
inhabitants and ensure timely multiple agencies and
resolution vendors
Ability to keep track of complaints
received
Ability to have an orientation
towards customer service















2.4.3. Skill gaps specific to I nfrastructure

Table 8: Skill gaps specific to the I nfrastructure segment

Function Level Skills required Skill gaps



Experienced Identification of tendering

personnel opportunities for infrastructure

creation, i.e. the ability to

identify potential business

opportunities

Ability to prepare technical

proposals to suitably cover

requirements indicated in the

bid document

Ability to estimate man-hours

needed for the project, number Inadequate techno-

of sub-contracted personnel
commercial orientation



required, number of labourers

required, etc.
Insufficient knowledge of



Ability to estimate
legal issues




Tendering
technological requirements


capital equipment needed,
Not very articulate while



cranes required
presenting or liasoning



Ability to understand the

tendering process and techno-
Poor communication skills,



commercial analysis of projects,
oral as well as written



including potential commercial

pitfalls, if any

Ability to prepare appropriate

cost estimates when bidding for

projects - project costing skills

Ability to understand technical

specifications of a bid and

convert the same into material

requirements

Ability to network with

colleagues outside the company




Function Level Skills required Skill gaps



so as to be appraised of leads as

they come up


Entry level Ability to understand the

personnel tendering process and techno-

commercial analysis of projects
Inadequate understanding of


Ability to maintain a strong


detailed planning of projects


network


Ability to undertake basic
Inadequate knowledge of


costing of projects


costing


Ability to coordinate with


various departments for
Inadequate ability to


detailing tenders accurately


maintain a strong network


Broad understanding of


construction techniques and
Inadequate understanding of


projects in construction


legal and contractual aspects


Ability to undertake basic


resource estimation of projects
Inadequate tender-writing


Ability to understand tender


skills


documents bidding


requirements

Basic understanding of legal

and contractual aspects