ASBL banking on tech to tackle challenges in construction sector

Ashoka Builders India Pvt Ltd (ASBL) is a new age real estate company having four major housing projects – ASBL Spectra, ASBL Spire, ASBL Springs and ASBL Lakeside – in Hyderabad. In a short span, it has successfully planned the construction of more than 10 million sq ft of residential area in the city’s top locations – Khajaguda, Kokapet, Pocharam, and Gachibowli.

Over the years, ASBL has carved a niche in the field of construction technology through robust backend systems in place. Their focus is delivering high quality products in committed timelines. In an exclusive interview, Ajitesh Korupolu, Founder & CEO, ASBL tells Bizz Buzz about their ongoing projects, land bank and deploying technology to address the challenges in the construction industry

Can you tell us about your background in the real estate and construction industry?

My father Vijay Bhaskar is the Co-founder of Ashoka Developers and Builders in 1989. As his son, I was exposed to the real estate and construction business from a very young age. Visiting construction sites with my father on weekends, I gained valuable insights into the complexities and challenges of the construction aspect of the business.

The exposure to construction and coordination with various stakeholders taught me the importance of efficient management in this field. It made me realise that construction is a critical component often overlooked by developers. Dealing with numerous vendors, contractors, labourers and engineers requires effective coordination. Any mismanagement can have a significant impact.

These experiences have shaped my understanding of the real estate industry and emphasised the importance of seamless coordination and problem-solving in construction projects. Later, I executed my first project - Ivana, which provided a total life cycle understanding. This led to the formation of ASBL, where we realised that intelligence and data are essential to tackle these problems effectively.

How has ASBL evolved since its inception in 2017?

ASBL has grown significantly, leveraging technology and data to streamline construction processes, manage supply chains efficiently and tackle labour-related issues. We have gained a deep understanding of the industry's complexities, enabling us to create a resilient and thriving workforce that embraces change. ASBL continues to evolve, striving to lead the industry with innovation and intelligence.

Our first project was launched in 2018, consisting of around 400 apartment units in 10 floors. Despite the challenges posed by the pandemic, we managed to complete and deliver it on time without any delays. The project was successful, and we invested approximately Rs 80 crore in it, generating around Rs 200 crore in sales.

Our margins for this project were around 12 per cent, and it was executed under a joint development mechanism, where we shared inventory with the landowner.

Which one do you prefer – joint development or outright purchase model?

In the joint development model, we partner with landowners, where they provide the land, and we take care of the construction. We share the inventory generated from the project. On the other hand, the outright purchase model involves us buying the land and developing the project solely, which requires more capital and carries higher risks.

We prefer the latter as it offers higher rewards also with a margin of around 22 per cent if executed well. Our entire business model is transparent, where the price we sell is what we register, without any hidden costs. This clear approach has been well-received by customers and banking partners alike, making financing and investments easier for us.

How do you arrange funding for your projects, particularly for outright purchase of lands?

We work with banks and non-bank financial companies (NBFCs) as well as alternate investment funds (AIFs), who provide 50 per cent of the capital required to buy lands. The remaining 50 per cent is raised by our family and investors. For instance, we purchased 3-acre land in Kokapet during 2019 and 8-acre land in Gachibowli Financial District this year.

How much are you investing on the land acquisitions?

We have already invested around Rs 70 crore for the three-acre plot in Kokapet to start a project called ASBL Spire. This year, we invested Rs 180 crore for the 8-acre plot in Gachibowli Financial District (ASBL Spectra), and Rs 240 crore for the five-acre plot in Puppalaguda. We are currently evaluating options for further acquisitions.

In December 2021, we acquired a 10-acre plot in Kukatpally Y Junction for Rs 250 crore. We are using this land for mixed development, selling it to other builders for various projects. In 2021-22, we acquired another 15-acre plot in Pocharam for Rs 80 crore. We are developing a mid-segment apartment project – ‘ASBL Springs’ in this area.

We are targeting customers willing to buy homes in the price range of Rs 50-60 lakh for 2 and 2.5 BHK units. The first phase of its construction with 480 flats is underway and we have sold 310 units out of them. All RCC work & brickwork is done, and plastering is currently in progress. It will have 1,500 – 1,800 flats in multiple phases. This is the only affordable project predominantly on the east side of the city.

What are your future plans for different segments and areas?

Our strategy is to have 40 per cent of our inventory in the affordable segment, in the East Zone, including the Pocharam area, priced around Rs 50-65 lakh. The rest, around 60 per cent in the West Zone covering Gachibowli and Puppalguda areas, will be in the upper mid-segment, with units priced between Rs 1.2 – 1.5 crore. After three years, we intend to look somewhere other than the West.

We don't have any immediate plans in the North and South Zones, as we already have significant inventory in the East and West Zones. As we continue to operate our business, we are constantly on the lookout for land. However, nothing concrete has materialised yet. We are specifically looking for land in the West Zone, where we have a strong presence and a good customer base.

Could you throw some light on the finances of the company?

We had sales of Rs 783 crore during last year and projected to reach sales of Rs 1,200 crore this year across three projects: ASBL Spectra, ASBL Spire and ASBL Springs. We are currently producing 1.2 million square feet of space per year, and we have a total of 1 million square feet of projects in the pipeline. This represents a 20 per cent increase in our production from last year.

How did you integrate technology into the real estate sector?

We realised that technology plays a crucial role in collecting data and enhancing intelligence. Many traditional real estate companies need to operate with a focus on technology. At ASBL, technology and data are at the core of our operations. Technology allows us to address challenges effectively and make data-driven decisions to drive success and overcome resistance to change.

How does this technology help in forecasting and making smarter decisions?

Digital twin technology allows us to collect and analyse a vast amount of data, enabling us to make more informed projections. Unlike traditional ERP systems, digital twins provide a deeper understanding of site activities and allow us to plan and execute tasks more efficiently. This level of data richness helps us in managing laborers and resources effectively.

Ours is the only company envisioning the future of technology with a focus on digital twin technology, where data is significantly amplified and allowed to make smarter decisions. For a project involving 500 apartments, we handle around 600-700 labourers daily, each engaged in different tasks across 40 different activities. Managing such a diverse workforce requires robust technology.

Additionally, the use of digital twin technology ensures a high level of quality for each apartment, with over 300 checks conducted and well-documented. This level of transparency empowers customers to track the progress and quality of their projects at any point. It is gaining interest from clients in the US as well. This indicates the versatility and global potential of our digital twin technology.

We have invested approximately 5 per cent of our profitability into R&D, specifically into technology. Our software applications are developed by experts in the field. Our investment in technology translates into tangible benefits for our customers. It allows us to be more confident about meeting delivery timelines, which is a major concern for homebuyers.

Let us know about the app developed by the company to enhance customer experience?

The customer app is currently under development, and we anticipate it will be ready in about six months. This app will provide customers with detailed information about their flats, including the progress of construction, dates of key milestones and other essential updates.