Anant Raj Limited, Market Cap: ₹ 7,774 Cr.
Company Overview:
ARCP started off as a construction company in 1969 and has worked on government contracts and projects for over 30 years. It gradually transitioned to a significant landowner in Delhi and NCR and entered commercial leasing and residential real estate. Till date, it has delivered more than 20mn sq. ft. of residential real estate projects, developed over 5mn sq. ft. of commercial space, and owns over 240 acres spread across prime locations in NCR. It has a comprehensive portfolio of residential townships, group housing projects, commercial developments, data canters, and hospitality developments spread across Delhi, Gurugram, and NCR.
Data Center:
3MW capacity of IT load is operational and another 3MW development is going on.
Capacity in first phase – 450,000 Sq. Ft. in existing building with 21 MW IT Load which shall be completed by year 2024 and will be further expanded to 50 MW IT Load by year 2025. Depending on the cashflows, this execution can be fast tracked. Existing rentals of Rs.90lacs/month/MW; Cost 15lacs/month/MW of running it. It will come down. Expected rentals of more than INR 200 crores/year once the initial phase of 21 MW becomes operational.
Data center certifications and tie ups in place.
*Scalable to 300 MW:
50 MW in Manesar(ongoing)
200 MW Anant Raj Tech Centre, Rai. 100MW Building in place and 100MW Built-to-Suit.
50 MW Anant Raj Tech Park, Panchkula. 5.25 green field available.
FY2024 Outlook:
Expanding Township
Deleveraging Balance Sheet: focus to be debt free by 2024.
Data Center Expansion: Target to have 21 MW by 2024.
New Projects.
Notes:
- Data Protection Bill is passed by Parliament. Demand wise not problem. Equipment cause delay, three more sources are tapped. Fully committed to reach 300 MW. Ready building and certified data centers. 3 to 4 years. Funding lowest in industry 25 to 26 cr per MW. Others at 50 to 55 cr per MW. Not taking debt for this. Rents will be used to fund project. After 21MW rent will fund to reach 300MW.
- Tirupati Housing 2000 houses, it is prestigious project. Next to Tirupati Airport, Land is from AP governments. AP Govt invited to replicate success of company’s project in Rajasthan. Margin will be at least 30%.
- Lands are fully paid, 10 years old. Margins will further improve with group housing.
- 640MW Capacity as of now for India. In 3 to 4 years it will 3500MW. Demand will be double to consider disaster management. Escalation every 3 years. Linked to inflation.
- IRR of data center is much better then competitors. Under cut not going to happen for next 3 to 4 years.
- Inventory of 10000 cr. in 63A Sector. 100 acre of land in Delhi, far more valuable then 63A. Replenish land bank for real estate. Replenish land bank for data bank not required. Enough for 300MW.
- Real estate have high demand after 10 years of recession, 75% is consumed by end users. As per broker circle, 250 flats can be sold in 2 to 3 days.
- For 21MW data center required 450cr. 200cr spend via internal accruals. 250cr. will be generated to other projects. 75 lacs/month/MW rentals will be used to set data centers. No project and balance sheet debt. Max. by 1st quarter by FY2025.
- Net debt 770cr. FY2024 to FY2025 substantial reduction is planned.
Technical:
- Trend is in tight area.
- 50 DMA: 219
- 200 DMA: 173
Investment Rational:
- Up surge of real estate, after 10 years of recession.
- Conservative management, will be near to zero debt in next few years.
- Data center business have first mover advantage and can execute projects at half price. Annuity type of business’.
- NPM at 15%.
- DLF/Godrej Properties/Brigades trade above 65 PE. Anant Raj at 38 PE.
- Interest rates trajectory will be on down side for next two years, which help to increase real estate demand.
Risk:
- Inherent risks associated with real estate demand.
- Data centers do not materialize as per plan.
Disclosure: Invested.
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Interview from Macrotech developers.
Two main points:
- Interest rates are picked and intense competition between mortgage providers.
- Real estate cycle is in 3rd year of long 15 year cycle
Provide your views and inputs to understand Anant Raj Limited or real estate cycle in general.
Disclosure: Invested views may be biased
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Preferential issue of 25 cr.
Preferential issue of fully convertible warrants of 50 cr.
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Item No. 1: Issuance of Equity Shares to the Public
- Up to 9,02,527 shares at Rs. 277/- each (premium of Rs. 275/-).
- Allottee: Gagandeep Credit Capital Private Limited.
Item No. 2: Issuance of Convertible Warrants to Promoter Group
- Up to 17,85,714 warrants at Rs. 280/- each.
- Allottee: Shri Ashok Sarin Anant Raj LLP.
- Warrants convertible to Equity Shares within 18 months.
Utilization of Gross Proceeds:
-
Repayment/Prepayment of Borrowings: (current debt. 848 cr., Debt/equity 0.29)
- Amount: Rs. 56.25 Crores
- Timeline: By September 30, 2025
- General Corporate Purposes:
- Amount: Rs. 18.75 Crores
- Timeline: By September 30, 2025
Total Estimated Amount to be Utilized: Rs. 75.00 Crores
Note: The payment for Equity Shares and Warrants is detailed in the resolutions. For Equity Shares, the entire consideration is to be paid before allotment. For Warrants, 25% of the Warrant Issue Price is paid before allotment, and the remaining 75% is payable at the time of exercising the Warrants.
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Floor price of 310.78 rs. company may give max. 5% discount.
Disclosure: Invested
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Great results from Anant Raj as expected. Eagerly waiting for concall to hear about Data center updates.
Revenue increased by 47.5% to ₹392 crore
Profit increased by 58.2% to ₹71 crore
EBITDA margin increased from 19.9% to 23%
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Wow. Looks like Anant Raj is getting close to 2008 highs for first time. One of darlings of last bull market based on land banks it had. Then market refused to give any valuation to land banks after market meltdown.
In January 2024, every investor whether promoters, FII, DII has exited some amount of shares… Any Info?? why such thing happening?
Due to qip promotes stake comes down not aware about others. For this u can check investor presentation it is mentioned in the presentation
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For Anant Raj, these two screen shots reveals its potential.
It is similar to Saregam where people chase that stock for Carvaan ( Including me 
), but their business had potential in music licensing. For Anant Raj, people may chase it for real estate, if plans for data centers get executed as management described, we will be rewarded handsomely. Of course it require patience, which is in short supply, specially now a days.
Disclosure: Invested
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Where will they get power from, for their data centres. Nothing mentioned in their investor presentation Feb.
There is nothing mentioned in concall or presentation about how they will get power. What relevance it has here about where they get power?
It was mentioned in concall that cost is approx. 15% to operate data center. Means 85% operating margin.
Disclosure: Invested.
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India’s data centre capacity is projected to grow from 0.9 GW in 2023 to 2 GW in 2026, a 122% increase. Despite generating 20% of global data, India only holds a 3% share of global data centre capacity. The cost per MW of setting up a data centre has risen to Rs 60-70 crore per MW from an average of Rs 40-45 crore per MW. Industry players’ revenue increased by 25% CAGR from FY17 to FY23, and is projected to grow at a 32% CAGR during FY24–26. The industry is expected to see 5 GW capacity addition announcements over 5-6 years. Key drivers of this rapid digitization are e-commerce, internet payments, online streaming, and new technologies such as 5G, IoT, and AI.
Ananat Raj can build data centre at 25 crore per MW due to building is ready.
D: Invested
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Anant raj uploaded a very nice presentation on data Centers and another comprehensive presentation too. Few concall info nuggets on data center business and comparison with Techno electric that I am jotting down here for my future reference.
As regards to data center, due to cheaper land and ready buildings, Anant raj is saying their capex comes to 28 crore per mw. Techno says 45 crore per mw.
Anant raj saying 300 mw in 4 years, 28 ready soon. 21 in Delhi 63a and 7 in Panchkula. Techno saying 250 mw by 2030. Anantraj saying they will get 90 lakh per mw rent and 15 lakh per mw will be expense so net 75 lakh per mw, for the colocation data Centers. They have a consultant/client with technical know how who has told them to install servers and they are doing it as a pilot project for 0.5 Mw. Can be 5 times this if their server pilot program becomes successful, and apparently they are confident but cautious too.
If we count 28 mw that they say is ready till December, that’s additional 60 crore per quarter net profit if their server experiment fails. And can be 180-200 crore per quarter if it succeeds. Right now 100 crore per quarter profit from real estate, means directly 50 percent addition to profit even if the server experiment fails. If it succeeds, it will be 3 times current profit every quarter.
Also Anant raj current land bank must be 3-5000 crore which gives a little bit comfort to valuation. Still I do not think it’s cheap, and I do not know how big a moat ready access to land and buildings is.
Anantraj is planning to follow the lease model for data Centers whereas I think techno electric will do epc or sell after execution of data Centers. Not sure about this point.
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