Puravankara: Well-Run, Growing Real Estate Developer at Fraction of NAV

Rahul Saraogi of Atyant Capital Advisors presented his in-depth investment thesis on Puravankara Limited (India: PVKP) at Asian Investing Summit 2019. Rahul also provided an update on the value investment opportunity in India.

Thesis summary:

Puravankara Limited is a South & West India focused real estate developer. The company focuses on middle income and affordable housing. The buyers are the actual end users. There is a unique financing model for affordable housing, which helps this business. The Goods & Service Tax, and the Real Estate Regulation and Development Act have also helped in a big way. There is a professional management and scalable business in place, leading to robust sales and a strong launch pipeline.

The company has conservative and healthy financials, with an attractive valuation and strong future growth: Market Cap of USD 260 million, NAV of approximately USD 1 billion, P/BV of .76, and a NAV growth rate of 25%. This is an attractive investment opportunity due to the name being unresearched and unknown. The company is also the cheapest real estate developer. The valuation discount is untenable. The strong growth will force the unlocking of value, with very high asymmetry.

Read a related article by Rahul on the housing opportunity in India.

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About the instructor:

Rahul Saraogi is the founder and managing director of Atyant Capital Advisors, advisor to the Atyant Capital family of funds. In the last 18 years he has focused on the Indian markets. His mission is to consistently identify the best 10-15 investment ideas from among the thousands of publicly- traded Indian corporations. Rahul’s value-based investment philosophy stands apart due to his belief in the paramount importance of corporate governance, specifically how management operates with its minority shareholders in mind. Rahul is the author of Investing in India: A Value Investor’s Guide to the Biggest Untapped Opportunity in the World a definitive guide on navigating the Indian markets published by John Wiley & Sons.

Rahul graduated from the Wharton School of the University of Pennsylvania with a degree in Economics. Outside of Atyant, he practices Vipassana, a 2,500 year-old meditation technique that helps people see things as they really are. Rahul splits time between Chennai, India and Miami.