PROJECT REPORT ON

FINANCIAL MODELLING & ANALYSIS OF 50 FLATS HOUSING PROJECT

IN GURGAON, HARYANA.

IN

Vardhan Consulting Engineers (VCE)

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTER OF MANAGEMENT STUDIES

BY

DEEPTI SUNIL BHALERAO

ROLL NO 2022022
MMS-II (SEM III)

YEAR 2022 - 2024

LALA LAJPATRAI INSTITUTE OF MANAGEMENT

MAHALAXMI, MUMBAI – 400034

PROJECT REPORT ON

FINANCIAL MODELLING & ANALYSIS OF 50 FLATS HOUSING PROJECT

IN GURGAON, HARYANA.
FINANCIAL MODELLING & ANALYSIS OF 50 FLATS HOUSING PROJECT
IN GURGAON, HARYANA.

IN

Vardhan Consulting Engineers (VCE)

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTER OF MANAGEMENT STUDIES

BY
DEEPTI SUNIL BHALERAO

ROLL NO 2022022

MMS-II (SEM III)

YEAR 2022- 2024

LALA LAJPATRAI INSTITUTE OF MANAGEMENT MAHALAXMI,

MUMBAI - 400034

SUMMER INTERNSHIP PROJECT

 SUBMITTED BY

DEEPTI SUNIL BHALERAO

ROLL NO – 2022022

MMS – II (SEM III)

YEAR 2022- 2024

 Certificate

This is to certify that the project work titled “financial modelling & analysis of 50
flats in Gurgaon, Haryana” is a summer internship work carried out by
Ms. Deepti Sunil Bhalerao.

The project was completed for “Vardhan Consulting Engineers (VCE)” under
the guidance of Kritika Verma.

I further certify that the said work has not been submitted in the part or in full, to any
other University.

Date: 5th December, 2023

Dr. Neetu Singhwal Dr. H.J. Bhasin

Project Guide Director
DECLARATION

I, Ms. Deepti Sunil Bhalerao , student of Lala Lajpatrai Institute of Management of

MMS II (Semester III) hereby declare that I have completed the summer internship
project on Financial Modelling & Analysis Of 50 Flats Housing project In Gurgaon,
Haryana, with Vardhan Consulting Engineers (VCE) in the Academic year
2022 - 2024. The information submitted is true & original to the best of my
knowledge.

Deepti Sunil Bhalerao

ACKNOWLEDGEMENT

At the outset of this project, I would like to express my profound thanks to a few
people without whose help, completion of this project would not have been possible.

First and foremost, I would like to express sincere thanks to Vardhan Consulting
Engineers (VCE) for giving me this opportunity to work with them.

The list is endless but to name a few special people, I would like to thanks to Kritika
Verma, Finance Department for being extremely supportive and guiding me
throughout my internship and giving me constant motivation and expert advice.
I would also like to thank the entire VCE, Finance Department for providing me their
precious time and making this internship a successful learning experience.

I am very grateful to Dr. H.J. Bhasin, Director of Lala Lajpat Rai Institute of
Management, for giving me the opportunity to do this project in Vardhan
Consulting Engineers (VCE).
I would also like to thank Dr. Neetu Singhwal for being an excellent mentor and
helping me whenever I approached him/her.

Last but not the least; I take pride in thanking my parents Mr. Sunil Bhalerao and
Mrs. Shubhangi Bhalerao, siblings and friends for their much valued support.
EXECUTIVE SUMMARY

Vardhan Consulting Engineers (VCE) is a consulting company founded by group of

engineers with strong academic background and experience of management. VCE
believes in to pay back to the society; Therefore, they provide Internships and
trainings to the students for the betterment of the society and students.

The Internship program introduced by VCE is unique and informative in nature. It

helps and guides students to enhance the skills and knowledge. I am pursuing MBA
in Finance and I choose Financial Modelling & Analysis as my topic of project and
internship; it gave me new information and a clear picture of core finance. I gained
knowledge about various topics like Project Finance, Financial Modelling and
Analysis of Financial model.

The unique thing about this internship Mr. Ashish Kumar, who is the founding
member of Vardhan Consulting Engineers personally mentors all the students and
interns through various ways, Be it Corporate Skill Development Program, Doubt-
Clearing sessions, Pre-Placement Program and Job Hunt program. VCE provided an
in-depth knowledge through its modules, which helps students and interns to get
experience and confidence. Due to Vardhan consulting engineer internship

The objective of this report is to highlight the financial analysis and feasibility of
this project. With the help of Vardhan consulting Engineers (VCE), I have work on
the analysis and study of feasibility of the real Estate project in the Gurgaon, Haryana
as real estate has proved to be real engine growth. Over the years the real estate
sector in india has emerged as a big engine for economic growth, as it second largest
employer next only to agriculture.

India‘s global competitiveness remains constrained and is adversely affected by lack

of infrastructure, which is critical for improved productivity across all sectors of the
economy. However, achieving the investment targeted for the Eleventh Plan presents
many distinct challenges. These relate not only to scarcity of financial resources but
also to lack of capacity within the government to implement these ambitious
programmers.
 INDEX

SR. CONTENT PAGE NO.

NO.
1 INTRODUCTION 1
1.1. Objectives of Study
1.2. Scope of Study
1.3. Research Methodology
1.4. Collection of Data
1.5. Sampling Plan
1.6. Research Limitation

2 OBJECTIVE AND SCOPE OF PROJECT 17

3 RECOMMENDATIONS FOR PROJECT 23

4 PROJECT FINANCING 26

5 REAL ESTATE PROJECT FINANCE 28

6 PROJECT DESCRIPTION 31

7 PROJECT PLANNING BRIEF 34

8 PROJECT DETAILS 37

9 FINANCIAL MODELLING 38

10 DATA INTERPRETATION 52

11 CONCLUSION 56

12 BIBILOGRAPHY 57
Real estate plays a crucial

1
 role in various aspects of human
life, including residential,
commercial, industrial, and
agricultural uses. It provides
housing for individuals
and families, office spaces
for various
Investing in real estate can offer potential benefits such as rental income, tax
advantages, diversification of investment portfolio, and the potential for long-term
appreciation.
However, it also carries risks including market fluctuations, property
management challenges, and liquidity constraints.

Overall, real estate is a vital sector that influences both the economyand individuals'
lives, providing housing, workplaces, and economic opportunities. It offers a wide
range of investment options and serves as a cornerstone of wealth creation for many
individuals and businesses.

2
OBJECTIVE OF THE STUDY

1. Create a thorough financial plan to assess how profitable and worthwhile it is to invest
in a collection of 50 housing flats in Haryana, specifically in Gurgaon.

2. Study market trends and potential risks to predict future finances for smart decision-
making in managing resources for our housing project.

3. Create different financial models based on different scenarios to understand how

various factors can affect the project's financial success. Provide suggestions on how to
handle potential issues.

4. can affect the project's success. Find ways to make the project more resistant to
changes in the market and economic uncertainties.

5. Examine funding choices and how to structure the project's finances in the best way,
considering market conditions and rules.
SCOPE OF STUDY

The real estate sector in Haryana, particularly in Gurgaon, has experienced

significant growth and development over the years. Gurgaon, also known as
Gurugram, is one of the major cities in Haryana and a prominent part of the National
Capital Region (NCR) of India. Here are some aspects that highlightthe scope of real
estate in Haryana, specifically in Gurgaon:

3
 1. Develop detailed financial models to assess the investment viability and
potential returns of 50 residential flats in Gurgaon, Haryana
2. Conduct a thorough analysis of market trends, property values, and economic
indicators to inform financial projections.
3. Evaluate financing options, including loan structures and interest rates, to
optimize capital utilization for the flat portfolio.
4. Assess potential risks and uncertainties, such as market volatility and regulatory
changes, to provide risk mitigation strategies for the investment.
RESEARCH METHODOLOGY

-Formation of problem

Gurgaon, Haryana, is witnessing rapid urbanization, leading to a surge in real estate

development. The proposed project involving the construction of 50 flats necessitates a
thorough financial modelling and analysis to address key challenges and uncertainties
inherent in the complex real estate landscape of Gurgaon. Problem The financial
modelling and analysis for the 50 flats housing project in Gurgaon face several critical
challenges that require careful consideration and strategic planning:

1. Market Volatility and Pricing Dynamics:

- Challenge: The real estate market in Gurgaon is characterized by volatility influenced

by factors such as economic trends, demand-supply dynamics, and regulatory changes.

- Impact: Fluctuations in property values and market conditions can significantly

impact the project's profitability and viability.

- Objective: Develop a financial model that incorporates market dynamics to assess the
sensitivity of the project to price variations and market trends.

4
2. Financing and Capital Structure:

- Challenge: Identifying optimal financing sources and structuring the capital in a way
that minimizes costs and maximizes returns poses a significant challenge.

Impact: Inadequate financial planning can lead to higher borrowing costs, affecting
overall project feasibility.
- Objective: Create a financial model to evaluate various funding options and optimize
the capital structure, considering interest rates, loan terms, and potential equity
partnerships.

3. Regulatory Compliance and Approval Delays:

- Challenge: Navigating the complex regulatory landscape in Gurgaon, obtaining

necessary approvals, and potential delays in the regulatory process.

- Impact: Regulatory hurdles can lead to project delays, cost overruns, and legal
complications.

- Objective: Integrate regulatory compliance factors into the financial model to

anticipate approval timelines and potential legal risks, ensuring realistic project
timelines.

4. Construction Costs and Project Management:

- Challenge: Accurate estimation of construction costs, effective project management,

and mitigation of unforeseen challenges during the construction phase.

- Impact: Cost overruns and construction delays can erode project profitability and
investor confidence.

5
 - Objective: Develop a detailed cost estimation model, incorporating contingencies and
ongoing project management protocols to minimize cost deviations.
5. Sales and Marketing Strategy:

- Challenge: Devising an effective sales and marketing strategy to attract buyers in a

competitive market.

-Impact: Suboptimal pricing strategies and ineffective marketing can lead to prolonged
inventory holding, impacting cash flow.

- Objective: Create a sales forecasting model that aligns with market trends, enabling
the formulation of strategic pricing and marketing plans to maximize sales revenue.

Conclusion: The financial modelling and analysis for the 50 flats housing project in
Gurgaon involve addressing critical challenges related to market dynamics, financing,
regulatory compliance, construction costs, and sales strategies. A robust financial model
is essential to navigate these challenges, providing a comprehensive view of the project's
financial landscape and enabling informed decision-making for its successful
implementation.
COLLECTION OF DATA

- SECONDARY DATA

Secondary data collection involves gathering information that already exists and has
been collected by someone else. Here are some key areas for secondary data collection for
a housing project in Haryana, Gurgaon:
1. Government Reports:
- Obtain relevant reports from government agencies, such as the Haryana
Urban Development Authority (HUDA) or Municipal Corporation of Gurgaon,

6
 which may contain information on zoning regulations, land use plans, and
infrastructure development plans.
2. Census Data:
- Access census data to gather information on population demographics,
income levels, and housing trends in the region.
3. Real Estate Market Reports:
- Refer to real estate market reports and studies conducted by real estate
agencies or consulting firms. These reports can provide insights into market
trends, property values, and demand for housing.
4. Local Newspapers and Magazines:
- Review local newspapers and magazines for articles and news related
to the real estate market in Haryana, Gurgaon. This can provide information on
recent developments, trends, and challenges.
5. Academic and Research Papers:
- Explore academic journals and research papers related to the real estate
market, urban development, and housing trends in Haryana.
6. Historical Data:
- Look for historical data on property prices, land values, and housing
trends in Gurgaon. This information can help in understanding the evolution of
the real estate market.
7. Online Databases:
- Utilize online databases and platforms that provide real estate data. This
may include property listing websites, market analysis platforms, and
government databases.
8. Building Codes and Regulations:
- Refer to existing building codes, zoning regulations, and construction
guidelines applicable in Haryana. This information is crucial for understanding
the legal requirements for the housing project.
9. Environmental Impact Assessments:

7
 - If available, review any existing environmental impact assessments for
the region.
This can provide insights into environmental considerations and potential challenges.

10. Infrastructure Maps:

- Access maps and plans related to existing and planned infrastructure
developments in Gurgaon. This includes roads, public transportation, water
supply, and electricity distribution.

11. Local Business Directories:

- Refer to local business directories to gather information on suppliers,
contractors, and service providers in the construction industry.
12. Social Media and Online Forums:
- Monitor social media platforms and online forums for discussions and
insights related to the real estate market in Haryana. This can provide a sense of
public opinion and concerns.
13. Public Surveys and Studies:
- Look for the results of any public surveys or studies conducted by
government agencies or research organizations regarding housing preferences
and community needs.
When using secondary data, it's important to critically evaluate the reliability,
relevance, and recency of the information. Combining secondary data with primary
data collected through your own research efforts will provide a comprehensive
understanding of the housing project's context in Haryana, Gurgaon.
SAMPLING PLAN

Creating a sampling plan is crucial for ensuring that your research on the project of 50
housing flats in Haryana, Gurgaon is representative and yields meaningful results.
Below is a simplified example of a sampling plan for your housing project:

8
1. Define the Population:
- The population of interest is potential buyers or residents in Haryana, Gurgaon.

2. Determine the Sample Size:

- Given the nature of the project (50 housing flats), aim for a sample size that is
statistically significant. You may choose to survey a percentage of the potential market,
considering factors like the diversity of preferences and demographics.

3. Sampling Method:
- Use a combination of random sampling and stratified sampling.
- Random Sampling: Randomly select individuals from the general
population.
- Stratified Sampling: Divide the population into strata (e.g., age groups,
income levels) and then randomly sample from each stratum to ensure representation
from different segments.
4. Inclusion Criteria:
- Specify criteria for including individuals in the sample. For example,
individuals aged 25-55 who are currently residing in Haryana, Gurgaon.

5. Exclusion Criteria:
- Define criteria for excluding individuals from the sample. This might include
people outside the target age range or those residing outside the geographical scope.

6. Sampling Frame:
- Create a list of potential participants. This could include residents, individuals
attending community events, or those identified through online platforms.

7. Data Collection Method:

9
 - Utilize a mix of online and offline methods, such as surveys, interviews, and focus
groups, to gather diverse perspectives.
8. Geographical Considerations:
- Ensure that the sample is geographically representative of different areas within
Haryana, Gurgaon, considering factors like urban and suburban preferences.
9. Time Frame:
- Set a specific time frame for data collection. Consider seasonal variations in
preferences and market conditions.
10. Pilot Testing:
- Conduct a pilot test with a small sample to identify and address any issues with
the survey instrument or data collection process.
11. Data Analysis:
- Plan for both quantitative and qualitative data analysis. Stratify the analysis by
relevant demographic factors.
12. Ethical Considerations:
- Ensure that the sampling process and data collection adhere to ethical standards,
including obtaining informed consent and protecting participant confidentiality.

13. Feedback Mechanism:

- Establish a mechanism for collecting feedback from participants to improve the
sampling and data collection process.
14. Adjustment and Iteration:
- Be prepared to adjust your sampling plan based on early findings and
feedback. The plan may need iteration to ensure it captures the diverse
perspectives of potential buyers.
15. Reporting:
- Clearly document and report on the sampling plan in your research
documentation.
This helps in transparency and replicability.

10
 Remember that the success of your sampling plan depends on its alignment with the
research objectives and the characteristics of the population you are studying. Regularly
review and refine your plan based on ongoing feedback and emerging insights during
the research process.
RESEARCH LIMITATION

Identifying and acknowledging research limitations is an important aspect of any study,

including a project focused on 50 housing flats in Haryana, Gurgaon. Here are some
potential research limitations that you might encounter:
1. Sample Size and Generalizability:
- The study involves a relatively small sample size (50 housing flats),
which may limit the generalizability of findings to a larger population. Results
may be specific to this particular project and may not be fully representative of
the diverse housing market in Haryana, Gurgaon.
2. Geographical Specificity:
- Findings and conclusions may be specific to the geographic location of
Haryana, Gurgaon, and may not be applicable to other regions with different
socio-economic or cultural contexts.
3. Time Constraints:
- Time constraints in data collection and analysis may limit the depth and
breadth of the study. Certain temporal factors, such as economic fluctuations or
changes in real estate trends, may not be fully captured.
4. Subject to Bias:
- There might be a risk of selection bias, especially if the sample is not
fully representative of the diverse population in Haryana, Gurgaon. Bias may
also arise if certain groups are overrepresented or underrepresented in the study.

5. Limited Stakeholder Involvement:

11
 - The study may not fully capture the perspectives and needs of all
stakeholders involved in the housing project. Limited input from potential
buyers, local communities, or regulatory bodies could impact the
comprehensiveness of the findings.

6. Assumption of Homogeneity:
- The study may assume homogeneity within certain groups (e.g., buyers
with similar preferences), overlooking potential variations within those groups
that could impact the success of the housing project.
7. External Factors:
- External factors, such as changes in government policies, economic
conditions, or unforeseen events (natural disasters, political instability), could
affect the feasibility and success of the housing project. These factors may be
beyond the control of the research.
8. Data Accuracy and Reliability:
- The accuracy and reliability of data collected, especially through
secondary sources, may be a limitation. Relying on outdated or incomplete
information could impact the validity of the study.
9. Limited Long-Term Perspective:
- The study might not provide a comprehensive long-term perspective on
the housing project's success or challenges. Long-term outcomes, market trends,
and resident satisfaction may not be fully captured within the scope of the study.

10. Ethical and Legal Constraints:

- Ethical considerations, such as privacy concerns or limitations on
accessing certain data, may restrict the scope of the research. Legal constraints
related to data protection and confidentiality may also impact the study.

12
Acknowledging these limitations is essential for maintaining transparency and
credibility in your research. Consider discussing these limitations in the research report
and suggesting areas for future research that could address some of these constraints.

13
CHAPTER 2: OBJECTIVE AND SCOPE OF PROJECT

OBJECTIVE

The proposed project aims to undertake the development of 50 housing flats in the prime
locality of Gurgaon, Haryana. The objectives of this residential development endeavor
encompass a comprehensive vision that seeks to address the housing needs of the
community while adhering to sustainable and aesthetically pleasing urban development
practices.

1. Housing Accessibility and Affordability:

To provide affordable housing options to a diverse demographic, including middle-

income families and young professionals. Ensure easy accessibility to essential
amenities, public transport, and commercial hubs to enhance the overall living
experience.

2. Sustainable Urban Development:

Implement green building practices to minimize the environmental impact of the

construction process and promote energy efficiency in the housing units. Incorporate
sustainable landscaping and water conservation measures for the development's
common areas.

3. Community Integration:

Foster a sense of community by designing common spaces that encourage social

interactions and community bonding. Organize community events and programs to
enhance the overall quality of life for residents

14
4. Infrastructure and Connectivity:

Improve local infrastructure, including roadways, sidewalks, and public spaces, to

ensure smooth connectivity within the neighbourhood.Collaborate with local authorities
to enhance public transport options and connectivity to major employment centers.

5. Safety and Security:

Implement state-of-the-art security measures, including surveillance systems and

well-lit common areas, to ensure the safety of residents. Collaborate with local law
enforcement to establish a secure living environment.

6. Architectural Excellence:

Engage renowned architects to design aesthetically pleasing and functional living

spaces that contribute positively to the urban landscape. Integrate modern design
elements while respecting the cultural and architectural heritage of the region.

7. Regulatory Compliance:

Ensure compliance with all local building codes, environmental regulations, and safety
standards throughout the construction process. Obtain all necessary permits and
approvals from relevant authorities in a timely manner.
8. Economic Impact:

Generate employment opportunities through the construction phase and subsequent

property management. Contribute to the local economy by attracting businesses and
services to the area.

15
9. Stakeholder Satisfaction:

Regularly engage with potential buyers and the local community to gather feedback
and incorporate suggestions into the project design. Strive to exceed customer
expectations in terms of quality, amenities, and overall living experience.

10. Timely Project Delivery:

Establish a realistic project timeline and adhere to it diligently to ensure timely

delivery of the housing units. Implement efficient project management practices to
minimize delays and cost overruns.

In summary, the project aims to create a harmonious living environment by focusing on

affordability, sustainability, community integration, and compliance with local
regulations. Through careful planning and execution, the development will contribute
positively to the urban fabric of Gurgaon while meeting the diverse needs of its residents.
Scope of real estate in Haryana, Gurgaon

The real estate sector in Haryana, particularly in Gurgaon, has experienced

significant growth and development over the years. Gurgaon, also known as
Gurugram, is one of the major cities in Haryana and a prominent part of the National
Capital Region (NCR) of India. Here are some key aspects that highlightthe scope of
real estate in Haryana, specifically in Gurgaon:

1. Infrastructure Development: Gurgaon has witnessed substantial

infrastructure development, including the construction of modern residential
complexes, commercial buildings, shopping malls, entertainment centers, and

16
educational institutions. The city has well-planned roads, flyovers, andexpressways,
such as the Delhi-Gurgaon Expressway and Kundli-Manesar-Palwal Expressway,
which have improved connectivity to Delhi and other parts of NCR.

2. Commercial Hub: Gurgaon has emerged as a major corporate and

commercialhub, attracting numerous national and international companies. It is home
to several multinational corporations, IT companies, financial institutions,
andbusiness parks. The presence of these companies has fueled the demand for
commercial spaces, including office buildings and retail spaces.

3. Residential Projects: Gurgaon offers a wide range of residential options,

including luxury apartments, gated communities, villas, and plotteddevelopments.
The city has witnessed the development of numerous residentialprojects by renowned
builders and developers, catering to different segments ofbuyers. The availability of
modern amenities, improved infrastructure, andproximity to employment center has
made Gurgaon an attractive residential destination.

4. Real Estate Investments: Gurgaon has been a preferred destination for real
estate investments due to the potential for high returns. The city has witnessed
consistent appreciation in property prices over the years. Investors, both from
India and abroad, have shown interest in residential and commercial properties
in Gurgaon, considering the city's growth potential.

17
1. Special Economic Zones (SEZs): Gurgaon has several SEZs that provide
incentives and tax benefits to businesses. These SEZs attract industries, generate
employment opportunities, and contribute to the overall development of the real estate
sector in the region.

2. Retail and Entertainment:Gurgaon boasts a vibrant retail and

entertainmentscene with the presence of numerous shopping malls, multiplexes,
restaurants. The retail sector has experienced significant growth, attracting renowned
national and international brands.
3. Connectivity and Proximity: Gurgaon's strategic location near Delhi and its
proximity to the international airport have been advantageous for the real estatesector.

The city's connectivity through roads, metro rail, and rapid rail transit systems has
enhanced its accessibility and attractiveness.

It is worth noting that the real estate market can be subject to fluctuations andexternal
factors. It is advisable to conduct thorough research, seek professionaladvice, and
evaluate market trends and dynamics before making any real estate investment
decision in Haryana, including Gurgaon.

18
CHAPTER 3 : RECOMMENDATIONS FOR PROJECT

1. Location Analysis:
- Conduct a thorough analysis of different neighbourhoods in Gurgaon to identify
the most promising location for the housing project.
- Consider proximity to major business hubs, schools, hospitals, and
transportation facilities.
2. Market Research:
- Understand the current real estate market trends in Gurgaon.
- Analyze the demand for housing flats in different segments (affordable, mid-
range, luxury).
3. Architectural Design:
- Collaborate with renowned architects to design modern and functional living
spaces.
- Ensure that the design complies with local regulations and incorporates
sustainable features.
4. Amenities and Facilities:
- Include attractive amenities such as a clubhouse, gymnasium, swimming pool,
landscaped gardens, and play areas.
- Focus on providing facilities that enhance the quality of life for residents.

5. Affordability and Financing Options:

- Offer a mix of affordable and mid-range housing options to cater to a diverse
range of buyers.
- Explore partnerships with financial institutions to provide attractive financing
options.

6. Technology Integration:

19
 - Integrate smart home technologies for security, energy efficiency, and
convenience.
- Consider incorporating sustainable and energy-efficient practices in the
construction and maintenance of the project.
7. Community Spaces:
- Design communal spaces to foster a sense of community among residents.
- Plan for parks, walking paths, and community events to encourage social
interaction.
8. Regulatory Compliance:
- Ensure that all necessary regulatory approvals and clearances are obtained
before starting construction.
- Comply with environmental regulations and contribute to sustainable
development.

9. Marketing and Branding:

- Develop a strong brand for the housing project and create a comprehensive
marketing strategy.
- Utilize online and offline channels to reach potential buyers.

10. Customer Engagement:

- Establish a customer-centric approach by providing transparent communication
throughout the project.
- Set up a customer support system for addressing queries and concerns.

11. Quality Construction:

- Emphasize on high-quality construction materials and methods to ensure the
longevity of the housing project.
- Consider green building practices for environmental sustainability.

20
12. Legal Considerations:
- Work closely with legal experts to ensure that all contracts, agreements, and
transactions adhere to legal norms.
- Provide clarity on ownership and possession-related matters.

These recommendations are general in nature, and it's crucial to tailor them based on
specific market conditions and the unique aspects of the project. Collaborating with
experts in real estate, architecture, and construction will be key to the success of the
housing flats project.

21
 CHAPTER 4: PROJECT FINANCING

INTRODUCTION
Project financing is a specialized form of financing that is used to fund large-scale
infrastructure, industrial, and commercial projects. It is typically employed for projects that
require substantial capital investment and have longterm revenue-generating potential.
Unlike traditional financing methods where the borrower's creditworthiness is the primary
consideration, project financing relies on the project's underlying assets and cash flows as
collateral. In project financing, lenders or investors assess the feasibility and profitability
of a specific project rather than solely relying on the borrower's financial standing. The
financing structure is designed to mitigate risks and allocate them among various parties
involved in the project. This approach allows projects to attract funding even if the sponsors
or borrowers may not have adequate credit ratings or collateral.
Here are some key features of project financing:

1. Special Purpose Vehicle (SPV): A project-specific legal entity, often a subsidiary, is

created to isolate the project from the sponsors' or borrowers' other assets. The SPV
holds the project assets, enters into contracts, and assumes the liabilities associated with
the project.

2. Non-Recourse or Limited Recourse: In project financing, the lenders' or investors'

recourse to the sponsors' or borrowers' assets is limited. If the project fails to generate
sufficient revenues, the lenders generally have no claim against the sponsors' or
borrowers' assets beyond the agreed-upon collateral.

3. Cash Flow-Based Repayment: The repayment of project financing debt primarily

relies on the project's cash flows rather than the sponsors' or borrowers' general revenues.

22
The debt is serviced through the project's operational cash flows, ensuring that the
project's success determines the ability to repay the debt.

4. Risk Allocation: Risks associated with the project, such as construction, operational,
market, and regulatory risks, are allocated among various project stakeholders. This
helps mitigate risks and aligns the incentives of the parties involved.

5. Long-Term Tenure: Project financing typically involves long-term loans with

maturities aligned with the project's lifecycle, which can span several years or even
decades. The extended tenure allows the project's cash flows to stabilize and provides
sufficient time for the project to generate returns.

Project financing is commonly used for infrastructure projects like power plants, toll
roads, airports, and large-scale industrial projects. It allows these projects to attract the
necessary capital by leveraging the project's potential revenue streams while mitigating
risks for lenders or investors.
CHAPTER 5: REAL ESTATE PROJECT FINANCE

Real estate project finance is a specific application of project financing that focuses on
funding real estate development projects. It involves the acquisition, construction, or
renovation of real estate properties with the intention of generating revenue through
sales, leasing, or rental income. Real estate project financing is commonly used for
various types of developments, including residential, commercial, industrial, and mixed-
use properties.

Here are the key aspects and considerations in real estate project finance:

23
1, Development Costs: Real estate projects often require significant upfront capital to
acquire land, obtain permits and approvals, and cover construction or renovation
expenses. Project financing can provide the necessary funds to cover these costs.

2. Revenue Streams: The primary source of repayment in real estate project finance is
the revenue generated from the property. This can include sales proceeds from selling
developed units, rental income from leased spaces, or a combination of both. Lenders or
investors evaluate the project's revenue potential to assess its viability and determine the
loan terms.

3. Collateral: The real estate property itself serves as collateral in project finance.
Lenders or investors secure their investment by placing a lien on the property, giving
them the right to seize and sell the property in case of default.

24
4. Market Analysis: A thorough market analysis is crucial in real estate project finance.
It helps assess the demand and supply dynamics of the target market, the competitive
landscape, and the potential returns on investment. Lenders and investors consider
factors such as location, demographics, market trends, and comparable property values
to evaluate the project's feasibility and potential profitability.

5. Risk Mitigation: Real estate projects carry various risks, including construction
delays, cost overruns, market fluctuations, and regulatory changes. Project finance
structures typically involve risk allocation mechanisms, contingency plans, and
contractual safeguards to mitigate these risks. Additionally, comprehensive due
diligence, feasibility studies, and market assessments are conducted to identify and
address potential risks.

6. Debt and Equity: Real estate project financing can involve a mix of debt and equity
capital. Debt financing is typically obtained from banks, financial institutions, or
specialized real estate lenders, while equity financing may involve individual or
institutional investors who provide funds in exchange for an ownership stake in the
project.

7.
Project Timeline: Real estate projects often have longer timelines due to the
complexities involved in land acquisition, design, permitting, construction, and
marketing. The financing structure is aligned with the project timeline, allowing for
phased disbursements of funds and repayment schedules that consider the project's
cash flow generation over time.

29

26
Real estate project finance plays a vital role in facilitating the development of real estate
properties, providing developers with the necessary capital to bring projects to fruition.
It allows investors to participate in real estate opportunities and offers lenders a
structured approach to managing risks associated with real estate development projects.

CHAPTER 6: PROJECT DESCRIPTION

DETAILS

Techvardhan PVT.LTD has acquired piece of land near Gurgram , Haryana and wants to
develop is as a residential building having 50 flats 900 sq.ft. each.

They are expecting to sell the flats at the rate 4000/ sq.ft. he expected CapEx is Rs. 8
crore and OpEx is 50 lakhs/ per annum for the whole project.

27
They are seeking non-recourse debt ( project financing) with 70:30 as D/E ratio from
leading commercial banks in India as a 12 year term loan.

LOCATION OF PROJECT

Proposed project site is located in Gurgaon's prime hotspot near Sohna Road,
GCR, sector 46, Gurgaon

SELECTION OF PROPOSED SITE

Selection of proposed site All the physical infrastructure facilities like trunk main of
water supply, Drainage & storm drain are planned in this area. So all proposed
infrastructure facilities will be available and city level infrastructure facilities will also
be available.
RAW MATERIAL REQUIREMENT

Construction materials i.e. cement, steel, wire, sand, aggregate, bricks etc. will be
procured from the local market as per requirements. Approximate Quantities are
mentioned below table:

Sr.No Material Quantity ( Approx)

1 Cement 68512 bags (28 kg)

2 Steel 176535 KG

3 Sand 245890 CFT

4 Agreegate 107812 CFT

5 Aerated Concrete Block 6061090 NO.

28
AVAIBILITY OF WATER & POWER

WATER REQUIREMENT AND ITS SOURCE: The main source of water is GMC
water supply. Treated Water will be supplied from GMC water mains. Drinking water
quality is as per with the quality of water supplied to other citizens. The water quality is
through necessary treatment maintained by GMC. As GMC is supplying treated drinking
water in water mains, there is no need for further treatment of water to make it potable.
During Construction, total water requirement is 8.0 KLD.

POWER REQUIREMENT AND ITS SOURCE: During Construction total power

requirement will be 500 KVA and source will be DHBVN. During Operational Phase
total power requirement will be 1250 KVA for flats, Lifts and pumps, source will be

DHBVN.

SITE ANALYSIS

1) CONNECTIVITY: Proposed project is the construction project of High Rise

Residential Building having total area is around with 90000 sq. ft with 45000 sq. ft of
built up area in Gurugram, Haryana

2) ROAD CONNECTIVITY STATE HIGHWAY – 20 km is around 3.0 km from the

proposed project site in SW direction.

3) RAIL: The Area is well connected by Railway. Gurugram Railway Station is around
10.0 Km from the proposed project site.

4) COMMUNICATION: The site has access of telephone, internet and mobile

connectivity.

5) LAND USE AND LAND OWNERSHIP: The Residential Building will be

constructed on the Private Land.

29
6) EXISTING LAND USE PATTERN: Land is non agriculture. There is no National
Park; Wild life sanctuary within a radius of 10 Km.

7) SOIL CLASSIFICATION: For the proposed project, soil testing shall be carried out.
At Ground level Blackish salty clay of high plasticity with sand particles.
CHAPTER 7 : PROJECT PLANNING BRIEF

1) PLANNING CONCEPT: Proposed project is the construction project of High Rise

Residential Building having total area is around with 90000 sq. ft with 45000 sq. ft of
built up area in Gurugram, Haryana

2) POPULATION PROJECTION During construction period 100 Man power will

required per day. After construction completion, approx. total 500 people will be there
permanent (including visitors)

3) LAND USE PLANNING For the proposed project Green Belt area shall be
developed at plot boundary, road. Green belt development plant is in initial stage which
will be submitted letter on. Detailed plan layout is attached as additional

4) LAND USE PLANNING For the proposed project Green Belt area shall be
developed at plot boundary, road. Green belt development plant is in initial stage which
will be submitted letter on. Detailed plan layout is attached as additional attachment.
Detailed land use breakup mentioned in the below table:
PROPOSED INFRASTRUCTURE:

1) RESEDENTIAL AREA: Proposed project is the construction project of high rise

residential building having total area is around 90000 sq. ft with 45000 sq. ft of
built up area in gurgram, Haryana.

2) SOCIAL INFRASTRUCTURE:

i) FACILITIES WITHIN SITE

30
 1. Common Plot
2. Water Supply

3. Electricity Supply

3) CONNECTIVITY: The proposed project site is well connected with the road,
railway and air.

4) DRINKING WATER SOURCE: The main source of water supply is GMC.

5) SEWERAGE SYSTEM:

- TYPE OF SEWAGE SYSTEM PROPOSED: Regular drainage line of NP3 class R.C.C.
pipes will be laid onthe internal roads of the developed site. This will be connected with
regular sewer line, disposing the sewage water in Sewage Treatment Plant.
- SEWAGE DISPOSAL POINT AND ITS INTEGRATION WITH CITY LEVEL
SEWAGE DISPOSAL SYSTEM : The disposal point is through GMC drains will be at
Sewage treatment plant.

6) VEHICLE PARKING FACILITIES: Adequate provision will be made for

resident’s parking at the proposed project site. There shall also be adequate parking
provisions for visitors so as not to disturb the traffic and allow smooth movement at the
site. However the Parking for plot owners will be within their plot as per HUDA Building
Bye Laws.

7) POWER REQUIREMENT: The power shall be supplied by Dakshin Haryana Bijli

Vitran Nigam (DHBVN).

31
CHAPTER 8 : PROJECT DETAILS

Schedule

Implementation of Project within a pre-determined time frame is an important factor for

the success of a project. Timely implementation saves on various costs like interest,
administrative overheads and helps to realize the goals as per predetermined objectives.
Implementation of Project involves co-ordination of different activities at various levels
of the firm and amongst different outside agencies. We are giving here under the details
of the Project Implementation:

Sr No Particular Duration

1 Basement works 1 Months

2 Ground floor works 1 Months

3 1st to 10th floor 2 Months

4 Outer plaster works 1 Months

5 Plumbing and sanitation 1 Months

6 Electrification 1 Months

7 Colour work 1 Months

8 Drainage and water supply services 1 Months

9 Street light and road services 1 Months

10 Social infrastructure works 1 Months

11 Allotment to beneficiaries 1 Months

TOTAL 1 YEAR

CHAPTER 9: FINANCIAL MODELLING

32
Introduction

Financial modelling is a powerful analytical tool that plays a fundamental role in the
world of finance, offering a structured approach to understanding, analyzing, and
projecting the financial performance of businesses. This method involves the creation of
mathematical models that represent a company's financial situation, enabling decision-
makers to gain valuable insights into its past, present, and potential future financial
health.

The primary objective of financial modelling is to provide a quantitative framework for

making informed business decisions. This involves the construction of detailed models
that capture the intricacies of a company's operations, revenue streams, expenses, and
investments. Through the use of historical data, key performance indicators, and various
assumptions, financial models serve as a dynamic tool for forecasting and scenario
analysis.
Key Components of Financial Modelling:

Financial modelling typically revolves around three core financial statements: the
income statement, balance sheet, and cash flow statement. These statements provide a
comprehensive overview of a company's financial performance, depicting its
profitability, assets and liabilities, and cash flows over a specific period.

1. Income Statement: This statement outlines a company's revenues, costs, and profits
over a designated time frame. It serves as a snapshot of the company's ability to generate
profits from its core operations.

2. Balance Sheet: The balance sheet provides a snapshot of a company's financial

position at a specific point in time, detailing its assets, liabilities, and shareholders'
equity. It is a crucial indicator of a company's solvency and overall financial health.

3. Cash Flow Statement: This statement tracks the inflows and outflows of cash over a
given period, categorizing activities into operating, investing, and financing activities.
33
It offers insights into a company's ability to generate and manage cash.
Importance of Financial Modelling:

Financial modelling is integral to various aspects of business decision-making,

including:

• Strategic Planning: Companies use financial models to formulate and evaluate

strategic plans, helping them make informed decisions about investments,
expansions, and other key initiatives.

• Valuation: Financial models are instrumental in determining the value of a

business, whether for internal purposes or in the context of mergers, acquisitions,
or investment decisions.

• Budgeting and Forecasting: Organizations use financial models to set budgets

and make projections, aiding in resource allocation and performance monitoring.

• Risk Assessment: Through scenario analysis and sensitivity testing, financial

models help identify potential risks and uncertainties, allowing businesses to
develop strategies to mitigate them.

In conclusion, financial modelling is a dynamic and indispensable tool in the financial

landscape, empowering decision-makers with the insights needed to navigate the
complexities of the business world. As technology continues to advance, the evolution
of financial modelling is likely to bring about even more sophisticated and insightful
approaches to financial analysis and decision-making
OBJECTIVES OF FINANCIAL MODELLING

Financial modelling serves several key objectives in the realm of finance and business
decision-making. These objectives are essential for gaining insights into a company's
34
financial performance, planning for the future, and supporting various strategic
initiatives. Here are the primary objectives of financial modelling:

1. Forecasting and Planning:

- One of the primary objectives of financial modelling is to forecast future

financial performance. By utilizing historical data and making assumptions about key
variables, financial models help in planning for the company's future operations and
resource requirements.

2. Budgeting and Resource Allocation:

- Financial models are crucial for the budgeting process. They assist in
allocating resources effectively by providing a structured framework for estimating
revenues, expenses, and capital expenditures.

3. Decision Support:

- Financial models serve as decision support tools for executives and managers.
They provide quantitative insights into the potential financial outcomes of various
decisions, helping stakeholders make informed choices about investments, projects,
and strategic initiatives.
4. Business Valuation:

- Financial modeling is used for business valuation, determining the intrinsic

value of a company. This is essential in scenarios such as mergers and acquisitions,
fundraising, and assessing the overall financial health of the organization.

5. Investment Analysis:

35
 - Financial models are employed to analyze the financial feasibility of
investments. This includes assessing the expected return on investment (ROI),
evaluating risks, and determining the attractiveness of different investment
opportunities.

6. Risk Management:

- Financial modeling includes risk assessment features, allowing businesses to

identify and analyze potential risks. This enables the development of risk mitigation
strategies and helps in making more robust and resilient business decisions.

7. Scenario Analysis:

- Financial models facilitate scenario analysis by allowing users to test different

assumptions and variables. This helps in understanding how changes in the business
environment or key factors might impact financial outcomes.
8. Capital Budgeting:

- Financial modelling is used in capital budgeting decisions, evaluating the

financial viability of capital expenditures such as new projects, equipment purchases,
or expansions. This aids in making sound investment decisions.

9. Performance Monitoring:

- Financial models help in monitoring actual financial performance against

planned or budgeted figures. This allows for the identification of variances and helps
in taking corrective actions when necessary.

10. Communication and Reporting:

36
 - Financial models serve as communication tools, allowing stakeholders to
understand complex financial information. They provide a structured and transparent
way to present financial data to investors, management, and other decision-makers.

11. Strategic Planning:

- Financial modelling supports strategic planning by providing a quantitative

basis for evaluating different strategic options. It aids in aligning financial goals with
overall business objectives.
12. Profitability Analysis:

- Financial models help analyze the profitability of products, services, or

business segments. This information is valuable for optimizing product/service
offerings and resource allocation.

13. Debt and Equity Financing:

- Financial models assist in evaluating the impact of different financing

structures, whether through debt or equity. This is crucial in determining the optimal
capital structure for the organization.

In conclusion, financial modelling plays a pivotal role in achieving various financial

objectives, ranging from planning and forecasting to valuation and risk management.
Its versatility makes it an indispensable tool for financial professionals and decision-
makers in today's complex business environment.
Project Title : Financial Modeling and Analysis of 50 Flats Housing Project in
Gurgaon, Haryana IN

Techvardhan Infra Pvt. Ltd (Any Company) “CLIENT” has acquired a piece of land near
Gurugram HR and

37
wants to develop it as a residential building having 50 flats of 900 sq. ft each.

They are expecting to sell the flats at a rate of Rs. 4000 / sq.ft. The expected CapEx is
Rs. 8 Crore and OpEx is

Rs. 50 Lacs / per annum for the whole project.

They are seeking a non-recourse debt (project financing) with 70:30 as D/E ratio from
leading commercial

banks in India as a 12 years term loan.

Please prepare a financial model and analyse the cost, revenue and debt repayment

along with finflow / cash flow analysis. Calculate equity IRR and DSCR.

COST SHEET

% of Total
Particulars Amount cost
Land 36000000 45%

Construction 20000000 25%

Interior 5600000 7%

Fixtures 800000 1%

Furniture 5600000 7%

Building Registration 800000 1%

Broker fee 2400000 3%

stamp duty 2400000 3%

Fund Raising fee 800000 1%

Transfer of Deed 2400000 3%

Interest during 2400000 3%

morotorium
Loan and Documentation 800000 1%
fee
HSE 0%

38
Total Capex 80000000 100%

O & M Cost (Monthly Breakdown) (OpEx)

Building Maintainence
15,00,000
Utilities (Electric + Water + Internet)
10,00,000
Salaries
10,00,000
Plumber + Electrician + Misc etc
5,00,000
Insurance (0.35 %)
5,00,000
Property tax
5,00,000
Total O&M Cost (per year) 50,00,000

39
FINFLOW SHEET

Total Capex 80000000

debt 70% 56000000

Equity 30% 24000000

Morotorium 1 year

Interest 10%

COD 01-Jul-23

First 30-Jun-24
year end

RESULTS
Equity IRR 20.92%
Min DSCR 0.46
Avg DSCR 2.56
Project IRR 16.77%

Project Assumptions

40
Inflation 0% Debt tenure 4 years USD/INR 75
Rate
DDT 0% Moratorium 1 year Discount 10%
Rate
Tax 0 Debt Rate 12% Construction 1 Year
Holiday time
Tax rate 25% On the basis of no. MAT 15%
Depreciation of unit sold

41
42
DEBT DETAILS

Debt Amount 56000000

Debt tenure 12
Interest Rate 12%
Morotorium 0.25
Payment periods 48

COD 01-
Jul23
End 30-Sep-
23

Period Date Interest Principal Total Balance

0 01-Jul-23 ₹ 16,80,000.00 0.00 1680000.00 56000000.00
1 29-Sep-23 ₹ 16,80,000.00 29294.99 1709294.99 55970705.01
2 28-Dec-23 ₹ 16,63,909.34 32810.39 1696719.73 55937894.63
3 27-Mar-24 ₹ 16,47,335.96 36747.63 1684083.59 55901146.99
4 25-Jun-24 ₹ 16,30,265.38 41157.35 1671422.73 55859989.64
5 23-Sep-24 ₹ 16,12,682.68 46096.23 1658778.91 55813893.41
6 22-Dec-24 ₹ 15,94,572.50 51627.78 1646200.28 55762265.64
7 22-Mar-25 ₹ 15,75,919.02 57823.11 1633742.13 55704442.52
8 20-Jun-25 ₹ 15,56,705.93 64761.88 1621467.81 55639680.64
9 18-Sep-25 ₹ 15,36,916.44 72533.31 1609449.76 55567147.33
10 17-Dec-25 ₹ 15,16,533.28 81237.31 1597770.59 55485910.02
11 17-Mar-26 ₹ 14,95,538.62 90985.79 1586524.40 55394924.23
12 15-Jun-26 ₹ 14,73,914.11 101904.08 1575818.19 55293020.15
13 13-Sep-26 ₹ 14,51,640.88 114132.57 1565773.45 55178887.59
14 12-Dec-26 ₹ 14,28,699.44 127828.48 1556527.92 55051059.11
15 12-Mar-27 ₹ 14,05,069.77 143167.89 1548237.66 54907891.21
16 10-Jun-27 ₹ 13,80,731.20 160348.04 1541079.24 54747543.17
17 08-Sep-27 ₹ 13,55,662.48 179589.81 1535252.28 54567953.36
18 07-Dec-27 ₹ 13,29,841.69 201140.58 1530982.27 54366812.78
19 06-Mar-28 ₹ 13,03,246.28 225277.45 1528523.74 54141535.32
20 04-Jun-28 ₹ 12,75,853.01 252310.75 1528163.76 53889224.58
21 02-Sep-28 ₹ 12,47,637.94 282588.04 1530225.98 53606636.54

43
 22 01-Dec-28 ₹ 12,18,576.42 316498.60 1535075.02 53290137.93
23 01-Mar-29 ₹ 11,88,643.05 354478.44 1543121.49 52935659.50
24 30-May-29 ₹ 11,57,811.68 397015.85 1554827.53 52538643.65
25 28-Aug-29 ₹ 11,26,055.37 444657.75 1570713.12 52093985.90
26 26-Nov-29 ₹ 10,93,346.37 498016.68 1591363.05 51595969.22
27 24-Feb-30 ₹ 10,59,656.11 557778.68 1617434.79 51038190.54
28 25-May-30 ₹ 10,24,955.13 624712.12 1649667.25 50413478.42
29 23-Aug-30 ₹ 9,89,213.12 699677.58 1688890.70 49713800.84
30 21-Nov-30 ₹ 9,52,398.86 783638.89 1736037.74 48930161.95
31 19-Feb-31 ₹ 9,14,480.16 877675.55 1792155.72 48052486.40
32 20-May-31 ₹ 8,75,423.91 982996.62 1858420.53 47069489.78
33 18-Aug-31 ₹ 8,35,195.96 1100956.21 1936152.18 45968533.56
34 16-Nov-31 ₹ 7,93,761.18 1233070.96 2026832.14 44735462.60
35 14-Feb-32 ₹ 7,51,083.36 1381039.48 2132122.83 43354423.13
36 14-May-32 ₹ 7,07,125.20 1546764.21 2253889.41 41807658.91
37 12-Aug-32 ₹ 6,61,848.30 1732375.92 2394224.21 40075282.99
38 10-Nov-32 ₹ 6,15,213.08 1940261.03 2555474.11 38135021.97
39 08-Feb-33 ₹ 5,67,178.82 2173092.35 2740271.17 35961929.61
40 09-May-33 ₹ 5,17,703.52 2433863.43 2951566.96 33528066.18
41 07-Aug-33 ₹ 4,66,743.97 2725927.05 3192671.01 30802139.13
42 05-Nov-33 ₹ 4,14,255.63 3053038.29 3467293.92 27749100.84
43 03-Feb-34 ₹ 3,60,192.63 3419402.89 3779595.52 24329697.95
44 04-May-34 ₹ 3,04,507.75 3829731.23 4134238.99 20499966.72
45 02-Aug-34 ₹ 2,47,152.33 4289298.98 4536451.31 16210667.74
46 31-Oct-34 ₹ 1,88,076.24 4804014.86 4992091.09 11406652.88
47 29-Jan-35 ₹ 1,27,227.86 5380496.64 5507724.51 6026156.24
48 29-Apr-35 ₹ 64,554.04 6026156.24 6090710.28 0.00

Period Date Interest Prinicipal Total

0 01-Jul-23 ₹ 0.00 0 0
1 30 June 2024 ₹ 67,20,000.00 2320461.23 9040461.225
2 01 July 2025 ₹ 64,41,544.65 2598916.57 9040461.225
3 02 July 2026 ₹ 61,29,674.66 2910786.56 9040461.225

44
 4 03 July 2027 ₹ 57,80,380.28 3260080.95 9040461.225
5 04 July 2028 ₹ 53,89,170.56 3651290.66 9040461.225
6 05 July 2029 ₹ 49,51,015.68 4089445.54 9040461.225
7 06 July 2030 ₹ 44,60,282.22 4580179.01 9040461.225
8 07 July 2031 ₹ 39,10,660.74 5129800.49 9040461.225
9 08 July 2032 ₹ 32,95,084.68 5745376.55 9040461.225
10 09 July 2034 ₹ 26,05,639.49 6434821.73 9040461.225
11 09 July 2036 ₹ 18,33,460.89 7207000.34 9040461.225
12 10 July 2038 ₹ 9,68,620.85 8071840.38 9040461.225
Total ₹ 5,24,85,534.70 56000000.00 108485534.703

45
PROJECT ASSUMPTION

46
CHAPTER 10: DATA INTERPRETATION

FINANCIAL FEASIBILITY ANALYSIS

Before an investment decision is made it is necessary to determine whether or not the

planned investment idea is feasible. The feasibility of an investment has to be considered
with respect to several different aspects in order to determine whether the investment
should be realized or not. Carrying out a feasibility analysis is therefore one of the most
critical step.

A financial feasibility study should be conducted at the onset to determine the economic
viability of a proposed venture before proceeding to the preparation of a business plan.
It identifies the startup costs, makes projections of profits and cash flows and determines
the return of the investment.

To assess the financial feasibility of investments relevant criteria, have to be chosen.

Financial feasibility calculations need to be done with care and the complexity of the
calculations depends on the number of different aspects that need to be considered. The
assumptions used in the calculations can, and often will, change as the project progresses
and then the analysis needs to be updated.

financial feasibility study, or FFS, should assess the viability of a project based on major
pivotal component: will the project or business have enough cash to complete the project
(and generate a profit). One of the bottom lines of any business is whether a company

47
can sustain itself, pay its employees and of course make a profit. A financial study can
help in this assessment. Components to consider include:
- COST ALLOCATION

The total project cost (CAPEX) of the project Rs. 80,000,000 and the
total of operating expenses (OPEX) is Rs. 5,000,000 per annum. The
expenses are expected to rise as per the inflation rate that is approx. 4%.
The allocation ofthe total project cost is as follows-

48
 - REVENUE GROWTH

The revenue growth during the period of 10 years has been increasing constantly due
to the appreciation in the value of flat that are been projectedas follows-

REVENUE
40000000
35000000

30000000

25000000

20000000

15000000

10000000

5000000

0
1 2 3 4 5 6 7 8 9 10 11 12

- EBITDA GROWTH

The EBITDA has been constantly growing negatively during the period of 10 years.
The continuous EBITDA is shown as follows-

49
 EBITDA

35000000
30000000

25000000

20000000

15000000

10000000

5000000

0
1 2 3 4 5 6 7 8 9 10 11 12
-5000000

- PAT

PAT
20000000

15000000

10000000

5000000

0
1 2 3 4 5 6 7 8 9 10 11 12
-5000000

-10000000

50
CHAPTER 11: CONCLUSION

Real estate development can be very exciting and profitable. It can also be
difficult and risky. Ultimately, the two main goals for a developer and his or her
lender are to mitigate risk and maximize profit. In order to accomplish those goals,
a forthright and accurate comparison needs to be made between potential home
buyers and the competition and future competition for those home buyers.
Without this information, it is difficult for any developer to determine the
proposed market they need to capture and the feasibility of a project.

Study of Residential suggest that, it is not that much easy to predict the feasibility
of project. To check the feasibility of such project, there is need to list out those
factors which cannot be control by project promoters, but such factors greatly
affect on the project cash flows. And after determining those factors, we would
able to perform sensitivity analysis of such project.

The report involves the financial modelling and analysis of 50 flats housing in
Gurugram, Haryana IN. For the project non-recourse debt is beneficial as it need
huge investment. By taking appropriate assumptions and data provided in,
financial model is prepared.

Financial viability of the project is determined by calculating the cash flow

statement, DSCR and IRR. The finding of the calculation is as below: Equity IRR
for the project is 20.92% and Project IRR for the project is 16.77%. Average
DSCR is 2.56 respectively. The project has a minimum DSCR is 0.46 .

From above findings, it can be concluded that development of project is

beneficial, considering DSCR and Project IRR of the project. Thus, it shows that
bank will definitely provide the loan as the project is financially feasible.
 56
BIBILOGRAPHY

http://plannersweb.com/2013/12/proforma-101-getting-familiar-with-a- basic-
tool-of-realestateanalysis/

https://plus.google.com/+EntrepreneurIndiaNewDelhi

https://corporatefinanceinstitute.com/resources/commercial-real-
estate/real- estate/
.https://www.google.com/search?q=financial+model+information&source=lmns
&bih=569&biw=12 80
images&tbm=isch&sa=X&ved=2ahUKEwiWmbH_rOv_AhVYgVYBHdSkDH
4Q0pQJegQIERAB&biw=12 80 ( kindly copy this link)

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PROJECT REPORT ON FINANCIAL MODELLING & ANALYSIS OF 50 FLATS HOUSING

PROJECT IN GURGAON, HARYANA. IN Vardhan Consulting Engineers (VCE) SUBMITTED
IN PARTIAL FULFILMENT OF THE REQUIREMENT OF MASTER OF MANAGEMENT
STUDIES BY DEEPTI SUNIL BHALERAO ROLL NO 2022022 MMS-II (SEM III) YEAR 2022 -
2024 LALA LAJPATRAI INSTITUTE OF MANAGEMENT MAHALAXMI, MUMBAI – 400034
PROJECT REPORT ON FINANCIAL MODELLING & ANALYSIS OF 50 FLATS HOUSING
PROJECT IN GURGAON, HARYANA.
FINANCIAL MODELLING & ANALYSIS OF 50 FLATS HOUSING PROJECT IN GURGAON,
HARYANA.
SUMMER INTERNSHIP PROJECT SUBMITTED BY DEEPTI SUNIL BHALERAO ROLL NO –
2022022 MMS – II (SEM III) YEAR 2022- 2024

Certificate This is to certify that the project work titled “financial modelling & analysis of
50 flats IN Vardhan Consulting Engineers (VCE) SUBMITTED IN PARTIAL FULFILMENT
OF THE REQUIREMENT OF MASTER OF MANAGEMENT STUDIES BY DEEPTI SUNIL
BHALERAO ROLL NO 2022022 MMS-II (SEM III) YEAR 2022- 2024 LALA LAJPATRAI
INSTITUTE OF MANAGEMENT MAHALAXMI, MUMBAI - 400034

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10% - https://www.studocu.com/in/document/university-of-mumbai/mms/dp-k-sip-all-
you-need/50533613
6% - https://www.scribd.com/document/442470600/212804502-Pmc-Bank-Summer-
Internship-Report