Suntech Realty aims to pre-pay Rs 250 cr construction premium between Oct-Dec
New Delhi: Mumbai-based realty player Suntech Realty Ltd aims to exploit the opportunities offered by the Maharashtra government by pre-paying construction premium to the tune of Rs 250 crore between Oct-Dec 2021.
The Maharashtra government has cut by half the premium fees paid by real estate developers for both ongoing as well as new projects between 1 August and 31 December 2021.
“ The savings that Sunteck can realize in 2021 by fast-tracking projects and paying premium fees within the year are significant. It is a no brainer for Sunteck to take full advantage of the massive savings afforded to it by this unique opportunity,” said the company in its latest investors presentation.
As a result, it will be pre-pay premium of about Rs 250 crore between October and December 2021, said the company. The ROE on these payments will be over 35 percent and hence the company will direct its cash towards these payments.
“We will use shareholder capital in the most prudent manner possible. If we have opportunities to deploy capital in high-return projects, we will do without any reservation,” the company said.
The firm feels that Maharashtra’s premium reduction in 2021 is a very good example of front loading capital expenditure to 2021 to maximize savings.