What do you guys think about Jaypee Greens Wishtown - NOIDA? Is this a good time to buy? Is Wishtown a good investment?

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  • Originally Posted by pkgandhi
    Wishtown has been delayed since 2007 when JP had no debt problems. It is a fool's errand to speculate on fire sale prices and I will not indulge in it, but cement asset sale is a good pointer. JP couldn't finish Wishtown when they had no cash flow problems. Now, when they can't raise even 30 crores to pay interest on loans and no contractor/supplier will give them credit on payment terms, how will they complete it ? You are forgetting much of the land/buildings are mortgaged and no one will take over a semi-sold, semi-constructed project in this kind of a market.

    Anyway even if I accept your valuation of 10k crore and let us even multiply it by 5 and say 50k crores, JP will probably still have a shortfall when stacked against group liabilities of over 130k, potentially.

    I think it has clearly been demonstrated that JP is not operating on a going concern basis. Otherwise banks wouldn't have forced them to sell cement plants for zero cash and seized nirman sadan and other land banks. Wait for these to be auctioned off. The valuations will surprise you.

    Hey dude JP WT is not the only asset left with JP - don't dramatise

    WT is Infratech which has 7-8k cr loans. It is easy to see WT alone is able to kill off that loan in one swipe. That then does not account almost 5000 acres left in NCR and Agra, the whole valuation of YEW and Himalayan eways, pending Aman and so forth.

    If you add contingent debt - which may not happen - you don't know the equivalent contingent assets.

    The 75k debt figure is also wrong as the power assets and others sales have not been factored in.

    You are just not doing an asset vs liability matchup correctly - do that once without continously inventing numbers on the debt side to make them look way worse than they are.
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  • Originally Posted by dineshsays
    What rubbish - banks in state of panic and all. This is standard practice in India - banks underwrite projects - on some collateral. Nothing to do with Jaypee.

    If this pans out - there are two ways - either Jaypee sells peaces of land in WT on peace meal basis and uses part of the proceeds for construction (as most of construction can be self funded by the delta on collections vs spend on the units themselves) or JP sells WT as-is where-is to the likes of Tata/Godrej and/or a PE player.

    The amount of money that a good developer can make out of WT for the location/ concept is staggering despite accounting for delays etc


    Banks financing the developer's land and simultaneously financing the customer's under-construction flat may be standard practice in India, but that doesn't change the fact that it is risky double-financing, which means the banking system basically lends twice the value of the collateral it holds. The practice is a concern for JP more than others I ly because JP has defaulted on almost all loans and is on the verge of bankruptcy.

    Again, it is a pipe dream to think that JP will be selling any assets going forward. Even the cement asset sale was managed by the lenders not JP. They only care about getting their loans paid, not if Wishtown is ever completed. All sales in WT once lenders take over, as is inevitable, will be directed to raise funds to repay loans, which lenders have a right to accelerate because of cross default clauses. The lenders have no interest in competing WT other than to the extent it helps immediate repayment of their loans.
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  • Originally Posted by Bharatiya
    WT land is not pledged to any Bank. Any collateral to Bank cannot be sold in open market. The slightest idea that Banks will seize private property in WT is preposterous.

    Only question is from where will JP find money to complete semi constructed towers? Where will JP find money to build internal Infrastructure and maintenance?

    In worst case scenario. Suppose JP goes under and forced to sell management duties of WT. If some 3rd party acquire these assets, they can levy a penalty fee on unregistered buyers for getting NOC from new management for registration of their properties at the authority. Owners of apartments, plots and semi constructed apartments pending possession WILL REMAIN the owners even in worst case scenario.

    Banks cannot do anything to owners of private property in WT. However, Banks can seize any unallotted and unsold inventory of Land and apartments in WT. That's the limit of Banks jurisdiction.


    Mate the infrastructure is almost ready

    All internal roads (bitumen - not kuccha) are ready, boundary walls are in place, drainage is done, 5 STPs in WT are in place, 5 water distribution plants are in place, most UG gas work from IGL is in place, I'd say about 50-60% of greenery also is established, shops are mostly setup. Yes clubs are half done and lot of other works are pending but 70% needed Infra for WT is already in place
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  • Originally Posted by dineshsays

    The amount of money that a good developer can make out of WT for the location/ concept is staggering despite accounting for delays etc


    Correct me if i am wrong. But JP WT inventory of apartments and Plots is already SOLD to buyers. So what exactly can JP sell in WT? As per my knowledge, JP can only sell Management duties of WT.

    How much unsold inventory does JP has in WT?
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  • At a minimum 110-120 acres of land at FAR of 2.0 (minimum). A smart developer like Tata can sell this at 8k psf easily - that alone is nearly 6k Cr they can make (less construction and marketing costs) - even if one feels that existing inventory is a zero sum game (which it is not - it is still a lot of money)
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  • Originally Posted by dineshsays
    Hey dude JP WT is not the only asset left with JP - don't dramatise

    WT is Infratech which has 7-8k cr loans. It is easy to see WT alone is able to kill off that loan in one swipe. That then does not account almost 5000 acres left in NCR and Agra, the whole valuation of YEW and Himalayan eways, pending Aman and so forth.

    If you add contingent debt - which may not happen - you don't know the equivalent contingent assets.

    The 75k debt figure is also wrong as the power assets and others sales have not been factored in.

    You are just not doing an asset vs liability matchup correctly - do that once without continously inventing numbers on the debt side to make them look way worse than they are.


    Lol, it is quite obvious you have absolutely no idea what contingent liabilities ( "contingent debt" , lol)and "contingent assets" mean. Dude ( :-) )please educate yourself before using terms you don't understand the meaning of, unless you want to embarrass yourself.

    Please answer one simple question. Why are banks seizing Nirman Sadan and WT land banks for JPA defaults ? It is because debt of JPA is secured by Infratech assets and vice versa . you can't look at Infratech debt on stand alone basis because of cross guarantees. Is that so difficult a concept to understand ? Just because you thought Nirman Sadan and the seized land banks were Infratech assets didn't prevent them from seized and it will not prevent them from being auctioned off to service default on JPA debt.
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  • Koi baat nai dost - I have no issues in embarrassaing myself - hope you had a good laugh :).

    Contingent assets are not reported and that's why neither you nor I know what they are.

    The house of debt report which you quote from did a thorough search of all liabilities of JP group and to say suddenly that they discounted all contingent debt is probably incorrect.

    Nirman Sadan was to be sold to ICICI since 3 years atleast. I reported this on IREF and can pull up the post if you wish. There are hardly any JP employees there.

    And Nirman Sadan is not seized. Please correct your information.

    Banks are forcing JP to sell and they are happily obliging. There is poor cash flow which is obvious. Deals like UT will take time. Unlike KFA - banks see a lot of assets and they want to ring fence.

    Again you are just not presenting data correctly - you take an assumption, use it and paint the darkest picture which is quite away from reality. This is bashing and panic mongering of the worst possible fashion.

    Even if some of RE assets belong to JPA - since JPA owns most of Infratech and Power as it serves as a holding company - a lot of their debt may be repeated in JPAs books (I am not sure of this though - limited financial knowledge).

    Do a full Assets vs Debt picture and see that all types of assets have been divested so far and then come to a conclusion.
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  • ICICI Bank did seize 5 Acre of JP Land in WT. Any unsold and unallotted land can be seized by Banks.
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  • Originally Posted by pkgandhi
    Banks financing the developer's land and simultaneously financing the customer's under-construction flat may be standard practice in India, but that doesn't change the fact that it is risky double-financing, which means the banking system basically lends twice the value of the collateral it holds. The practice is a concern for JP more than others I ly because JP has defaulted on almost all loans and is on the verge of bankruptcy.

    Again, it is a pipe dream to think that JP will be selling any assets going forward. Even the cement asset sale was managed by the lenders not JP. They only care about getting their loans paid, not if Wishtown is ever completed. All sales in WT once lenders take over, as is inevitable, will be directed to raise funds to repay loans, which lenders have a right to accelerate because of cross default clauses. The lenders have no interest in competing WT other than to the extent it helps immediate repayment of their loans.


    It is your opinion it is on the verge of bankruptcy - it is NOT a fact. It is a state of your mind.

    All of what you quote is your assumptions and NOT facts. Lenders taking over is NOT a fact.

    Infact I am almost certain it will not happen for sold inventory for sure.

    I am now certain you will continue to bash based on rhetoric and are unwilling to do some simple maths on how much assets there are and how much debt and how much the EPC and other businesses get them on an annual basis.
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  • Originally Posted by dineshsays
    Koi baat nai dost - I have no issues in embarrassaing myself - hope you had a good laugh :).

    Contingent assets are not reported and that's why neither you nor I know what they are.

    The house of debt report which you quote from did a thorough search of all liabilities of JP group and to say suddenly that they discounted all contingent debt is probably incorrect.

    Nirman Sadan was to be sold to ICICI since 3 years atleast. I reported this on IREF and can pull up the post if you wish. There are hardly any JP employees there.

    And Nirman Sadan is not seized. Please correct your information.

    Banks are forcing JP to sell and they are happily obliging.

    Again you are just not presenting data correctly - you take an assumption, use it and paint the darkest picture which is quite away from reality. This is bashing and panic mongering of the worst possible fashion.


    Dost, firstly I know how to read balance sheets and don't need some crappy analysts at credit Suisse to tell me what the debt of a company is. It is a common amateur mistake to ignore contingent liabilities and sometimes even professionals do. It is usually also a sign of poor accounting quality if contingent liabilities are large, since good companies will make provisions on the balance sheet against liabilities they consider likely.
    An example of contingent liability is that if CCI imposes a penalty on JP and JP challenges it in court, they can list it as a contingent liability until higher court verdict. A good conservative company will recognise the loss immediately and make provisions. Contrary to what you might hope for, there are no "contingent assets" ( lol) against this kind of contingent liability. In the best possible ( but unlikely) scenario, the contingent liability will just disappear.

    If Nirman Sadan is actually sold to ICICI, everyone in ICICI's risk management department should be fired for increasing their exposure to JP rather than decreasing it. Nirman Sadan will be auctioned off by ICICI, not bought by them.

    What is the difference between Nirman Sadan being seized and banks forcing JP to sell off Nirman Sadan and using every paisa raised to repay the loans ?
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  • Originally Posted by pkgandhi
    Banks financing the developer's land and simultaneously financing the customer's under-construction flat may be standard practice in India, but that doesn't change the fact that it is risky double-financing, which means the banking system basically lends twice the value of the collateral it holds. The practice is a concern for JP more than others I ly because JP has defaulted on almost all loans and is on the verge of bankruptcy.

    Again, it is a pipe dream to think that JP will be selling any assets going forward. Even the cement asset sale was managed by the lenders not JP. They only care about getting their loans paid, not if Wishtown is ever completed. All sales in WT once lenders take over, as is inevitable, will be directed to raise funds to repay loans, which lenders have a right to accelerate because of cross default clauses. The lenders have no interest in competing WT other than to the extent it helps immediate repayment of their loans.


    It is a pipe dream??? Stop your nonsense dude - the divestment story of Jaypee is the biggest of corporate India bar NONE - not a single company has divested so much of their assets EVER

    Is your longingness to bash a situation so high that you fail to see even facts? There are atleast two more sales which should be announced shortly - the Bhilai cement sale and Bina

    I think you ought to stop now - so shall I - let's just see what happens.

    You have the guts - how many months will it take for JP to declare bankruptcy - here and now 6,7,8 - how many. No long term 2-3 years - by that time WT will be 90% done in anycase and I honestly won't care what happens to Jaypee.
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  • Originally Posted by Bharatiya
    ICICI Bank did seize 5 Acre of JP Land in WT. Any unsold and unallotted land can be seized by Banks.

    Bharatiya Ji - I don't disagree. Even if all land in WT is taken by banks - most of the Infratech loan will have been resolved. But note that most land is out of YEW of which Jaypee has plenty to shell out.

    Atleast tell me about your thoughts on WT being a saleable asset based on what I mentioned earlier maye - yes or no - enough for Infratech to come out of debt? And for WT to be delivered??
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  • Originally Posted by dineshsays
    It is a pipe dream??? Stop your nonsense dude - the divestment story of Jaypee is the biggest of corporate India bar NONE - not a single company has divested so much of their assets EVER

    Is your longingness to bash a situation so high that you fail to see even facts? There are atleast two more sales which should be announced shortly - the Bhilai cement sale and Bina

    I think you ought to stop now - so shall I - let's just see what happens.

    You have the guts - how many months will it take for JP to declare bankruptcy - here and now 6,7,8 - how many. No long term 2-3 years - by that time WT will be 90% done in anycase and I honestly won't care what happens to Jaypee.


    Well bankruptcy laws in India are more complex and less clearly defined than most other countries, so i am not sure when formal bankruptcy will be declared but JP is already being managed like a bankrupt company (sale of cement assets and take over of Nirman Sadan). I think in six months it will be apparent to even non-professionals that the company is being run for the benefit of lenders ( which is what bankruptcy effectively is).
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  • @pkgandhi This double financing is pretty normal. The banks money is secured as they have a lien on the money coming in from the buyers. But many builders diverted the money from land purchases, so the banks have created project specific escrow accounts. If done in the right way it is a good idea as it provides leverage to the builder and the bank is assured of the money coming in from the apartment sales. The bank only needs to ensure that the full loan is paid off by the time the apt is ready for delivery.
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  • Nirman Sadan has NOT been taken over - misquote after misquote. It is an old story that it was going on the block a long time back.

    Haha - if they effectively want to service/repay the bank loans and bank are prodding/pushing them on - it is a bankrupt company.

    Wow - genius? If I take a loan and am unable to service it for a few months because of a cash flow situation - I am bankrupt. Aap mahaan ho dost.

    Unitech is not selling UGCC land, banks have declared them NPAs even so.. So they are now effectively bankrupt right??

    What an amazing anology.
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