ANALYSING CUSTOMER NEEDS &

PERSPECTIVE

900 Homes Constructed & Delivered………

Headquartered in Western India, Foliage is a leading professional real estate

solutions provider focusing on the affordable housing/Low Income Housing (LIH)

segment in Gujarat, India. We are 5 years old (young we would like to call

ourselves) now in LIH segment (started LIH in 2009). Foliage has a sound track

record of delivering three affordable housing projects in industrial belts in

Ahmedabad (Vatva, Bavla & Gerathpur) and another project in Ankleshwar near

Surat.

Foliage executes and develops real estate projects with the help of associate

companies by handling all the needs of a real estate development right from

concept, design, and construction to planning and marketing.

Affordable housing units offered by Foliage cost Rs 6,00,000 to Rs 12,00,000/-

per unit and will target households in the income group of Rs 15,000 – Rs 25,000

per month.

Foliage’s Event Calendar for LIH:

YEAR EVENTS

2008 Tie up with Monitor Group for advisory support

to address low income segment

2009 Launched the First ever Low income housing

project at Vatva, Ahmedabad called Navjivan

Flats.

2010 Increased focus on LIH segment by launching

2nd project named Navjivan Park at Bavla, On

the outskirts of Ahmedabad.

2012 Further increased our boundaries and started

two landmark projects Navjivan Vihar and

Navjiavn Homes at Gerathpur, Ahmedabad and

Ankleshwar, Near Surat respectively. Also we

started in-house construction.

2013 Handed over successful possessions for first

two projects

2014 Started handing over possession of Geratpur &

financial closing of first 2 projects.

OUR PROJECTS:

FINISHED PROJECTS:

1st

Project at Vatva named

Navjivan Flats

464 units located at fast

growing area of Ahmedabad

Price Band of 2, 81,000/- to

7, 00,000/-

2nd

Project at Bavla named

Navjivan Park

221 units spread over 1.42

acres of land

Price Band of 6, 82,000/- to

11, 56,000/-

PROJECTS UNDER CONSTRUCTION:

3rd

Project at Gerathpur

named Navjivan Vihar

A project of 391 units with

completion of phase 1

Price band of 4, 98,000/- to

9, 73,000/-

4th

Project in South Guj Region

-Navjivan Homes at

Ankleshwar

Located at Asia’s largest –GIDC Ankleshwar

A project of 305 units

Price band of 3, 97,000/- to

12, 00,000/-

COMPETITIVE ADVANTAGE:

1. Customer Satisfaction

Moving into new house has given our low-income customers a sense of up

gradation, a feeling of belonging, pride of ownership and importantly a surge in

aspirations. They are tailors, auto-rickshaw drivers, and factory workers etc…who are highly satisfied after owning a house.

Mr. AmrutravPatare

Navjivan Flats

Unit type: 1RK

Approx. Price-Rs. 3, 14,000

“My Dream Home, My Navjivan”

Mr. Ravi Gupta

Navjivan Vihar

Unit type: 1BHK

Approx. Price-Rs. 9, 73,840

Profession- Provision store-keeper

“I am happy to get my own house with

all facilities and good neighbourhood.”

Mrs. Pinky Khatri

Navjivan Vihar

Unit Type- 1BHK

Approx. Price- Rs. 5, 68,400/-

“In Navjivan we feel tension free. Our lifestyle has changed. After all

it’s our own house.”

Mr. Sanjay Joshi

Navjivan Flats

Unit type: 1RK

Approx. Price- Rs. 2, 80,999/-

“We feel Navjivan is more special than reality, home more special than

what we had imagined.”

”

Mr. Kishor Mali

Navjivan Homes-Ankleshwar

Unit Type- Shop

Approx. Price- Rs.18, 99,999/-

Working at Cloth Shop

“Navjivan Homes has given more than expected and was able to get a shop at

good rate here.”

Mr GaurangPithadiya

Navjivan Vihar

Unit Type- 1BHK

Approx. Price- Rs. 7, 60,200/-

Looking back over the past five years, the progress of the LIH market has been

encouraging and the stories we hear from low-income customers about their new

houses (and the impact on their lives) are heart-warming.

Social Impact on the customers:

Majority of our customers are from the income group (less than INR 25,000

per month) and they are in real need of houses.

One of the positive outcomes of these projects has been creation of quality

rental stock for the low-income customer.

Small formats (like 1 RKs) and small homes (compact 1 BHKs/2BHKs)

increase the affordability for low-income customers.

Earlier Housing and now: Most owners lived earlier in rented houses and

are first-time home buyers, thus getting a house of their own is an

experience of pride for them.

Mr. Devendra Tank

Navjivan Homes-Ankleshwar

Unit Type- 1RK

Approx. Price- Rs. 4, 22,900/-

Working as Receptionist at Hotel

“I could not buy a house as my income was low…but with Navjivan I could buy my own house at affordable prices.”

Mr. Vinubhai Patel

Navjivan Homes-Ankleshwar

Unit Type- 1RK

Approx. Price- Rs. 4, 10,000/-

Works at Car Auto Garage

“I have got my own house at affordable rate with all facilities. My dream turned into

reality.”

Typically skilled workers, petty traders, clerks/supervisors, and self-

employed are the mixed group of customers who are interested in buying

affordable houses.

Most customers use savings to make the down payment but almost 25% of

them borrow informally as well; many customers depend on the developer’s recommendation in selecting a source for the loan.

Customer are satisfied with following facilities:

a) Improved living conditions – open spaces in and around the site, natural light and good ventilation and attached toilets and bathrooms

b) Good neighbourhood – ‘gated complex’ gave a sense of security to most owners and also meant a secure environment for their children to play.

Quality of neighbours(and hence good environment for their children to grow up in) was also appreciated by the customers

c) Larger unit sizes – for most customers, the new home was larger or had lesser number of occupants and hence a larger per capita living space

for them

d) Improved utilities – 24/7 water supply in the new house was a big

improvement over the previous housing of these customers

Customers are reliant on public transportation; therefore, ensuring nearby

markets, schools, hospitals, and public transportation is necessary and so

we execute the project in such locations where all facilities are available.

Low-income housing finance has enabled customers to build an important

asset that will reduce their expenses in the longer term and can shield

them from financial shocks or emergencies in future.

The delay in delivery (and hence possession) can impact customers on

numerous fronts – finances, planning for children’s education and other unforeseen circumstances.

Customers are aware of construction progress-linked payments, loan

terms like EMI amounts, fixed/floating rate, pre-EMI, and pre-payment

procedure and conditions. We educate them well before hand so that there

is no confusion further.

48%

52%

Type of Job versus No. of

Bookings

Formal

Informal

Types of customers with their work profile:

Large numbers of customers are having private jobs. The below mix

reflects the employment profile of our first project Navjivan Flats.

52% of our customers are coming from informal sector of job which

means those who are not highly educated and are having low

incomes fall under this group.

36

193

58

88

63

2

7

3

0 50 100 150 200 250

Gover e…

Private Job

Investor

Businessman

Housewife

Farmer

Professional

Retired…

Customer Occupation

Navjivan Flats

Number of bookings

Mostly the customers are coming from lower level management

works which generally comprises of petty traders or who are into

private jobs but not getting very high salary and prefer low income

housing.

Customer’s preferences with respect to loan and financial

companies:

CLP versus Down payment: Majority of customers prefers CLP i.e.

Construction Linked Plan in which payment is done by the customer as and

when the construction gets over.

2%

46% 52%

Managemet level at which customers work

Upper Level Middle Level Lower Level

29%

71%

Payment Plan opted by Customer

Down Payment

CLP

Average Unit Price: Customers generally prefer units with price ranging

from 4 to 6 lakh as large number of customers fall under this category.

Approx. INR 5, 07,176 is the avg. unit price.

Loan amount and loan % sanctioned: Contrary to expectations,

customers are comfortably paying their EMIs, and undergoing the loan

process has significantly improved financial awareness and understanding of

terms.Average loan amount which customers have taken is INR 4,21, 326 an

average loan % sanctioned till date is 78%.

Source of Housing Finance: Majority of customers get loans from

housing finance companies with HFDC the top provider followed by specialist

HFCs catering to the informal sector.

119

198

84

19

0

50

100

150

200

250

2-4 lakh 4-6 lakh 6-8 lakh 8 lakh and

above

Avg Unit Price

Bookings

6% 4%

8%

21%

30%

2%

9%

1%

8%

4% 7%

Sources of Housing Finance

Cooperative banks

Bank of Baroda

DHFL

Gruh Finance

HDFC

MAS Finance

MHFC

Muthoot Housing Finance

2. SALES MILESTONES:

In the first project of LHI “Navjivan Flats” we met our sales target in a span of just six months. We had launched our project in Oct 2009 but then

formally we launched in June 2010 and in the very first month of launch we sold more than 45% of the total units. Thereafter we were able to meet our sales targets and thus we have almost sold all of the units barring a few.

In 2011-2012 of 221 units 53 % units were sold which increased to 219

units in 2012-2013 i.e. 99%.

In 2012-2013 we sold close to 220 units (56%) in Navjivan Vihar

(Geratpur) and within next year i.e. 2013-2014 we sold 314 units out of 391 (80%). This project has been a remarkable milestone in our business. We did ground breaking on 11th April 2012 and in 2 years we are giving

possessions to customers.

3. “Leadership Approach: OUR BEST PRACTICES:”

Integration of ERP system, Standard Operating Procedures and project

management document, forms the technological backbone of the company

resulting in streamlined internal control processes;

ERP: Integration of myriad processes like Finance, Engineering, Payroll, CRM,

Marketing and HR by which company is able to save cost and time. It helps in

making real time information available to management to take strategic

decisions. Foliage is investing approximately Rs. 7.2 lakhs per annum in the

ERP software.

SOPs: Developed standard operating procedures which help to tackle critical

situations as well as to adopt standardization in managerial practices. It is

divided into four parts:

a) Checklists b) Forms c) Reference Files and d) MIS Report Formats

Robust Project Management Document: Project management software is

utilized by the company to prepare the process flow and to identify the critical

tasks as well as milestones during the project wherein time line and costs are

given to map each and every task.

Decentralization: Decision making process is decentralized which helps to

solve issues quickly. Right from departmental head to SBU heads &

managerial staff everyone possesses accountability for their own decisions

within the framework of SoPs.

Robust Procurement Process- With increasingly complex supply chains and

globalized operations, enterprises need robust procurement processes in

place, to achieve the right balance between standardization and flexibility,

and to ensure better compliance, control and monitoring. At Foliage, we

typically follow a four-pronged approach towards procurement process design

to develop best-in-class processes by assessing the process, redesigning it,

implementing and continuous improvement.

Quality Control Process- Slowly and gradually we realized that setting up

quality standard and COQ- cost of quality analysis at every phase is must.

Hence we have developed such techniques to check the quality at various

stage of construction and meet the customer requirements.

3. Project Execution Strategy

3 stage land screening, streamlined construction processes supported by a

strong technological backbone and facilitating home loans through leading

financiers summarize Foliage’s sound project execution strategy.

4. Revenue Collection

With redefined sales strategy to increase the proportion of number of loan

customers and in redefining construction process, ERP systems and provisions

to mitigate collection risk, we have achieved a competitive edge in this area.

Sales strategy & revenue Collection

1 Internal customer assessment based on discussion & KYC form filling

2 Classification of customers to identify potential loan customers

3 Assistance from sales staff in obtaining home loans

Calling bank representatives to meet customers at sales office Providing bank contacts to customers

4 Requirement of pre-sanction letter from loan customers before booking

5 Booking of non-loan custoter taking into account their total family income/other sources of financing

5. Multiple Partnerships with reputed Institutions

Foliage has developed linkages with financiers to facilitate easy customer

funding and strategic alliances with reputed institutions (e.g. The Monitor

group) to develop low cost housing solution.

Partnership with Monitor Delliote – A global management consulting firm

with expertise in market based LIH housing.

Establishing linkages with leading financiers for approved project funding

(e.g. SBI, Cosmos Bank, HDFC Bank, IDBI Bank, ICICI Bank, PNB, Central

Bank of India, Bank of India, MHFC, DHFL and MAS Financial Services)

6. LEADERSHIP TEAM: committed to catalyze social change

Mr. Nehal Shah, Promoter and Director (Corporate Services)

An MBA graduate from Philadelphia University, US

Mr. Nehal Shah has served as the AIESEC Association’s national VP and has been on the AIESEC Ahmedabad alumni advisory board

He is instrumental in helping the company to meet its financial,

operational and revenue goals

Mr. Nirav Shah, Chief Strategist (Corporate Operations)

A graduate from Akron University, Ohio, in construction management

He serves as the consulting strategist in Foliage and looks over firm’s ingenious designs

Managerial Hierarchy

3

4

7

16

Top Level Management

Middle Level Management

Support Staff

WAY AHEAD -

While the basic necessities of life – food, clothing, and shelter – are increasingly

becoming a luxury and unaffordable, luxury items such as televisions, mobile

phones, refrigerators, etc. are become affordable! While we are often amazed at

the progress our country has made when we see an auto rickshaw driver with a

mobile phone, we fail to notice that he is still living in a slum-like dwelling.

Thus the sheer size of the opportunity in low income housing - estimated at about

21 million un-served urban households (who can afford housing in the Rs. 3 lakh

to Rs. 10 lakh band) and a market worth Rs. 1.1million crore – will ensure that

the already rapid growth seen to date continues. The commercial impact of

building these houses, and the social impact of providing these homes through

affordable loans, has the potential to change India’s socio-economic landscape in

the years to come.

While the concept of affordable housing seems to be a simple solution to current

housing woes, its execution remains complicated due to the unclear policy

framework. Development of large-scale affordable housing is the greatest

necessity of urban India today and in order to make it successful, there should be

establishment of a single window clearance system, formulation of innovative

micro mortgage lending models and tax subsidies.

Not only this, it would require “will” from all the stakeholders by slightly adjusting their interest towards a wider social cause.

Thank you

Bhavi Dwivedi

(Finance Officer)

bhavi.dwivedi@foliage.in

+91 9228001160