Investment in Real Estate sector in India

1. Investment in Real Estate sector in India Multiple Buildcon Pvt Ltd Delhi

2. Investment Scenario - India • 2 ways of investment in Real Estate & Housing sector • Direct Route • RBI Approval Route or Alternate Route

3. Direct Route of Investment in Real Estate & Housing Sector - 1 • What does this mean : • No approvals required • Indian company can well receive funds from their foreign partner through proper banking channels • Who is allowed : • Only NRIs (Non resident Indians) are allowed to invest upto 100% in the real estate & housing project • Pls refer pg 6 of presentation for alternate means of investment and fully legal

4. Direct Route of Investment in Real Estate & Housing Sector - 2 • What is the definition of Real Estate & Housing Project under legal parlance : • Development of serviced plots and construction of built up residential premises • Investment in real estate covering construction of residential and commercial premises incl business centres and offices • Development of townships • City & regional level urban infrastructure facilities, incl both roads & bridges • Investment in manufacture of building materials • Investment in participatory Ventures in a & c above • Invetsment in Housing Finance Institutions which is also opened to FDI (Foreign Direct Investment) & NBFC (Non Banking Finance Co)

5. Direct Route of Investment in Real Estate & Housing Sector - 3 • What is the definition of Real Estate & Housing Project under legal parlance : • Development of serviced plots and construction of built up residential premises • Investment in real estate covering construction of residential and commercial premises incl business centres and offices • Development of townships • City & regional level urban infrastructure facilities, incl both roads & bridges • Investment in manufacture of building materials • Investment in participatory Ventures in a & c above • Investment in Housing Finance Institutions which is also opened to FDI (Foreign Direct Investment) & NBFC (Non Banking Finance Co)

6. Direct Route of Investment in Real Estate & Housing Sector - 4 • Under recent guidelines in 2006 (further to IEM Regulations 2005 dt 19-7-2005), 100% of FDI is allowed under Townships, Housing, builtup infrastructure and construction development projects. The sector would include but not restricted to housing, commercial premises, hotel, resorts. Hospitals, educational institutions, recreational facilities, city and regional level infrastructures SUBJECT to following guidelines : • Min area to be developed under each project shall be as below : • Development of serviced housing plots – 5 Ha • Construction Development project – 50000 sq Mtr • In case of combination, any one of the above 2 conditions

7. Direct Route of Investment in Real Estate & Housing Sector - 5 • The investment shall be subject to following conditions : • Min capitalisation of USD 10 mil for wholly owned subsidiary and USD 5 mil for JV with Indian Partners. The funds would have to be brought in within 6 months of commencement of business of the company • Original investment can not be repatriated before a period of 3 years from completion of min capitalisation. However, investor may be permitted to exit earlier with prior approval of Govt through FIPB (Foreign Investment promotion Board)

8. Alternate Route of Investment in Real Estate & Housing Sector-1 • To have humble beginning in the real estate & housing sector; we propose the following proposal – • A Foreign investor can become a shareholder in an Indian co specifically formed for working in real estate sector • Equity of foreign investor may be from 51% to 74% • For becoming equity partner, single window clearance from RBI is reqd wherein detailed project shall have to be submitted with basic details (normal time consumed for approval is max 2 months) • No min cap on the investment from foreign investor (it shall be Project specific) • Funds transfer for purchasing equity through banking channels • Remittance to Foreign director under regular dividend remittance route through RBI approval

9. Alternate Route of Investment in Real Estate & Housing Sector-2 • Benefits of our proposal : • No min cap on investment : Even USD 1 mil can be invested • To experience Indian Real estate market • Proper documentation of funds transferred through banking channels & complete accounting/accountability • Various smaller size project opportunities may be tapped like conversion of underdeveloped/developed industrial plots in NCR (national capital region) into offices for IT/ITES or big export houses

10. Alternate Route of Investment in Real Estate & Housing Sector-3 • Fall outs of our proposal : • RBI approval for inward & outward remittances • Project can be started only once funds are received • Real Estate business is high return & high risk and prone to various economic factors • Our plans to overcome fall outs : • Lawyer & Chartered accountant to be hired specifically for the RBI approval & documentation • RBI approval to be applied well in advance with basic project reports & even the prior investment may done by Indian co. after scenario analysis • Investment in Housing sector may be avoided upto Oct,07 as little slowdown whereas industrial & commercial sector may be tapped for regular better returns

11. Conclusion • NRI permitted to freely invest in real estate • RBI approval reqd for smaller investments by foreign investors but in normal conditions it may be through • Inward & outward remittance of funds may be through proper banking channels • Indian real-estate sector is all set to grow drastically in next 10-15 years & you may partner us in benefitting alongwith the growth • This is Food for thought………….