Need to serve all asset classes across MMR: Keystone Realtors CMD

Boman Irani said that the company will launch a senior living project, get into data centers and will divest 3.35 per cent to meet Sebi norms to partially fund capex

Despite a moderation in the demand for housing across the Mumbai metropolitan region (MMR), city-based Keystone Realtors, which operates the Rustomjee brand, expects growth to double over the next three to four years. Boman Irani, chairman and managing director, Rustomjee Group, in a face-to-face interview with Prachi Pisal, tells that the company will launch a living project for seniors, get into data centres and divest 3.35 per cent to meet Sebi norms, to partially fund capex. Edited excerpts:

 

What does FY26 look like for the company compared to FY25?

 

We have tied up 22 projects worth about Rs 17,800 crore in terms of gross development value (GDV), from FY23 till FY25. In FY25, we had said that we would launch two projects in every quarter and in line with guidance, we have launched seven projects worth Rs 5,019 crore. One project got launched in April due to a delay in environmental clearance, missing the guidance. In FY26, we have already launched three projects with a GDV of Rs 4,000 crore in Q1FY26 out of the Rs 7,000 crore guidance. We grew at a compound annual growth rate (CAGR) of about 35 per cent in the last two years, in line with the guidance; it will more than double from here in the next three to four years.

 

We will also see a strong growth in profitability. We have about Rs 40,000 crore worth of projects in the pipeline, of which township projects are about Rs 14,500 crore. More than 50 per cent of our launches in FY26 will be redevelopments. Our pre-sales should be around Rs 4,000 crore for FY26, (up 33 per cent year-on-year). Currently, we have 16 ongoing projects. Those are worth Rs 11,500 crore, out of which the unsold inventory is around Rs 6,000 crore.

 

What is the capex for FY26 and how will it be funded?

 

It was Rs 682 crore in FY25. We are increasing our (project) launches from Rs 5,000 crore in FY25 to Rs 7,000 crore in FY26. So, it will be around Rs 700-800 crore for FY26. We already have a cash balance of Rs 874 crore as on March 31, 2025. We also need to dilute the 3.35 per cent of the promoters’ stake by November 2025. We are yet to decide on what the mix of primary and secondary will be, because of the market situation. Then we have Rs 6,000 crore worth of inventory and Rs 3,000 crore that is yet to be collected for the sold units, which will throw free cash flow post the projects’ operational expenses and debt. Debt is also available. Our current leverage ratio is 0.12. Our stated goal is to stay within 0.75, which is around Rs 2,200 crore. We will not go to Rs 2,200 crore, but we have ample room. Our next year's target for the investment will be easily achieved with our internal sources. We also have a Mt. K Kapital category II fund of about Rs 790 crore. The mandate of that fund is to invest in Rustamjee’s projects. That capital is also waiting to be deployed. Overall, we can invest Rs 3,000 crore in this market. The current cash balance and source of capital are sufficient to take care of our 30-35 per cent growth year-on-year.

 

What is the strategy behind getting into plotted developments and townships?

 

Since we are restricting ourselves largely to MMR, we need to serve all the asset classes. We’re in affordable homes (priced at Rs 50-80 lakh) to uber-luxury housing. Now plotted development because there are no organised developers today who are serving the MMR market. We are offering the land at about Rs 2,500 per square foot, and its value has the potential to grow by at least 3 to 4 times in 10 years, given the infrastructure boom. Also, the plotted development segment has a margin of 30-35 per cent to start with versus the regular real estate business that has a net margin of 20-22 per cent. The churn is also faster than a residential project. It needs lower bandwidth, has a lower tenure, so the return on equity is higher.

 

Townships give a continuous return on development. Initially, the entry cost seems high, but over a while, it gets repaid, and then there is a continuous yield from those projects. Here we use an asset-light model where we don’t buy land unless it comes to us. We are looking at a few, one or two of them in the portfolio always help to give us a continuous supply and create demand. Now, we are foraying into senior living. Our first project will be launched before the end of FY26 in Mumbai. We have invested in a senior living company, and we are also learning from them. It will be the next big thing. 

 

What are your plans for data centres? Why foray into commercial development?

 

We’ve tied up with Singapore’s Keppel Land, both parties are exploring the potential and working out the feasibility. Mumbai has become a hotbed of office space activity. With these, there’s growing demand by individuals or smaller setups for offices which we are providing, as a first base. We are timing ourselves well, restricting to demand-led locations. But 70-75 per cent of Rustomjee's portfolio by volume and value will continue to be residential. Affordable is not giving us the margins, but it gives us a continuous supply. The largest part of our market in Mumbai is between Rs 3 crore to 5 crore, but we will continue to grow in the uber-luxury segment as well.

 

Are you looking at any major market other than MMR?

 

We forayed into Nagpur. It is poised to become the logistics hub of the country. We are investing about Rs 50 crore for a residential project with some retail development. We are expecting a revenue of about Rs 950 crore to Rs1,000 crore.

 

What challenges do you foresee impacting growth?

 

We are a calibrated company. We have achieved the guidance that we gave for the last two years, and we don't see ourselves failing anywhere on that account. We've already crossed 50 per cent of our mark of launches in the first quarter itself. We are well-positioned to be a company that will see explosive growth this year.

 

Numbers say that there is some slowdown in sales across the top Indian markets. How do you look at that?

 

I have not seen a slowdown anywhere. There might be some slowdown in certain micro-markets of MMR. But it won’t be a continuous linear curve. There will be glitches and times when there is a blip. The recent trade tariffs and geopolitical tensions were a worry. But after that, Operation Sindoor happened, and then suddenly, the sentiment was upbeat. I am seeing continual growth, especially in certain real estate micro-markets of Mumbai. We will pick up as many projects as we can in Chembur, Mahim, and Matunga, given the infrastructure growth. We are going towards the centre of the city because we see that part of the city is getting developed now. India is blessed with an abundance of needs. America, China, South Korea, and Japan were built on the back of real estate. It is India's turn now. We can take advantage of these strong winds that are blowing favourably for us and make the most of this growth. We just need to be cognisant of it.