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Interviews - Transparency In the real estate Industry


T Chitty Babu, chairman and CEO of Akshaya
Dhanalakshmi
editor@probro.net

.
Chennai,Chennai,Tamil Nadu.

T Chitty Babu, chairman and CEO of Akshaya, talks about early days and his quest for bringing more clarity in the real estate sector.

Starting with a seed capital of just Rs. 10,000 in 1998 to a company with a turnover of Rs. 350 crores today, Chitty Babu has successfully created one of the biggest and fastest growing real estate companies in this part of the country. Born in a small village called Puthoor near Kanyakumari, Chitty Babu was far away from an urban environment during the early days of his life. Growing up in a place where none of the buildings were taller than a couple of stories, Chitty Babu was fascinated by the tallest building in the vicinity — a clock tower in Nagercoil. That is when he realised where his passion laid — designing and constructing tall buildings.

Although his father was a teacher, Chitty Babu had to move to many different schools due to his mischievous nature. After completing his school, he got into civil engineering as it was very popular with government institutions at that time and offered excellent job opportunities.

During his four year stint at SSIT Tumkur, Chitty Babu picked up a number of things, right from living in an urban city to learning four different languages — Tamil, Malayalam, Kannada, and Telugu. Like most parents, his father wanted him to complete his masters and take up a government job but Chitty Babu had some other plans. After completing his engineering in 1987, he left for Chennai and started looking for employment opportunities there. “Not wanting to spend a few more years of my life studying, I ran away from home with Rs. 1000 in my hands,” admits Chitty Babu.

With no previous work experience, getting a job wasn’t easy. “After numerous applications and more than 17 interviews, I finally managed to secure a job as a CE supervisor in Dual Structurals,” he confesses.

EARLY DAYS
Chitty Babu’s quest for transparency is well reflected even during the early years of his career. While most candidates would go lengths to convince a prospective employer that they are in for the long haul, Chitty Babu chose not to keep his employer in the dark. “I told them on the very first day that I planned to work in the organisation only for two years and then move on to start my own development company,” he says.

But that two years became six years before Chitty Babu thought of moving out and starting his own firm. His employer — not wanting to lose an ace resource — set up another company (Dual Structurals) and elevated him as a director. During this period, he learned many different aspects of the construction business besides engineering, picking up the finer nuances of management, planning, administration, and even interacting with customers.

When Chitty Babu finally quit his job and decided to start his own development company, the market was at its peak and he did not have enough funds to invest in land. In 1995, with a considerable construction experience and a firm belief in himself, Chitty Babu formed a proprietorship company called Akshaya Structurals and started out as a contractor. He managed to bag his first project almost immediately and clocked a turnover of Rs. One crore in the very first year.

He elaborates, “For the first three years, we took up all kinds of construction projects —residences, schools, hospitals, factories and institutions.” Akshaya Structurals earned a good repute in the industry for completing projects on time but Chitty Babu’s dream of becoming a developer still eluded him.

In 1998, he formed Akshaya Homes, a proprietorship company and took up its first project — Sneham — at Mugalivakkam, a suburb in Chennai. Akshaya Homes started developing innovative projects each with a different combination and design. This was backed by a strong focus on processes, systems, and ethical business practices. As business was growing fast, Chitty Babu decided to take the company to the next level and changed it to a private limited company in 2001 – Akshaya Homes Pvt. Ltd. In 2010, it was rebranded as Akshaya Pvt. Ltd.

QUEST FOR TRANSPARENCY
Under Chitty Babu’s leadership, Akshaya launched a series of projects, delivering them on time, some even ahead of schedule. He focused on making Akshaya an organisation driven by robust systems, procedures, processes and people. Today, Akshaya is one among the 11 real estate companies in India to receive the integrated ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007 management certifications.

“We are also one of the only two real estate companies in India to get the SA 8000:2008 global standard for social accountability,” he says with a sense of pride.

During our conversation, Chitty Babu made a very interesting comment: “Informed customers are never a threat to any business. In fact, they are your biggest brand ambassadors.” To help his customers take informed decisions, he has taken up numerous initiatives. “We started a movement in 2001 by publishing a 25-point booklet called Akshaya Home Facts, which was later updated to 50 points.”

The ‘Akshaya Home Facts Book’ lists out 50 essential guideline rules compiled exclusively for the benefit of customers, detailing the rights of every property buyer. “The booklet is a platform for customers to understand terrace rights, car parking ratio, sharing of common areas, etc.,” he elaborates. Akshaya Homes also conducts regular workshops on the same points. The company has set up a dedicated dial-in help line number for customers where they can call and get their queries on buying and selling property answered.

In the year 2003, when Akshaya was clocking a turnover of just about Rs. 40 crores, Chitty Babu approached CRISIL to rate the company. It initially got a rating of DA3, which was later upgraded to DA3+. No other real estate company in the region had applied for CRISIL ratings at that time. Currently, Akshaya has all its projects rated by the agency.

A firm believer in giving back to the society, Chitty Babu believes that the pursuit of wealth creation cannot be at the cost of being insensitive to the environment. “We should leave behind a better place for the future generation to live in,” he insists.
In 2005, Akshaya took a bold step and announced a company policy of constructing only green buildings. Currently, the company has 10 ongoing projects, of which, three are 
platinum pre-certified rated, five are gold pre-certified rated and two are awaiting ratings. Akshaya is one of the founding members of IGBC.

The company is also audited every six months by CRISIL. The financials, marketing plans, PR, sales, technical and progress reports are sent every three months to the agency for review - not an easy task for a company of its size.

It is encouraging to see a real estate company proactively approach an agency to review its business and processes, especially as such audits and reviews are not yet mandatory. Chitty Babu adds, “post these audits, the ratings of our company can either go up or go down but we have a track record of improving our ratings every single time.” These proactive measures have put Chitty Babu at the forefront of the campaign for transparency in the real estate business with many in the industry branding him ‘Mr. Transparent’.

“We strive to be transparent in our dealings with all the stakeholders involved in business with Akshaya – customers, vendors, financial institutions, consultants and government institutions,” he explains. Akshaya was acknowledged for having the best legal systems and documentation and highest transparency in the country for four consecutive years by CRISIL.

ON A MISSION
Moving beyond his role at Akshaya, Chitty Babu is also working actively on bringing more transparency in the sector as the current national secretary of CREDAI and past president of Chennai and Tamil Nadu chapters of CREDAI. He believes CREDAI`s Mission Transparency will bring in a revolutionary change in the Indian real estate business. “It will lead to ethical business practices, by which, the supply of homes could be increased through single-window approvals. Ethical practices will also reduce costs,” he adds.

When asked about the case for transparency in real estate, Chitty Babu was quick to reply: “Bringing in more transparency in the sector will eventually benefit everyone. To raise funds, the best option is financial institutions. By bringing in more transparency in their business, developers can access cheaper funds from lenders,” he asserts.

“Banks are willing to lend to real estate developers who are transparent, carry out ethical business practices and deliver projects on time,” he adds.

Like many others, Chitty Babu has quite a few expectations from the upcoming real estate regulation bill. “The draft bill, as initiated by the Centre, was focused primarily on the responsibilities of the real estate developers. The proposed law should, instead, be ‘comprehensive in scope’, covering all stakeholders,” he asserts. Developers, financial institutions, home buyers and government service agencies should be part of the forthcoming Regulatory Bill," he adds.

Expressing his hope and concern, Chitty Babu says that the bill should not become yet another `window` to add up to the woes of the sector, but should be a single window clearance system in the real sense for all project approvals. “This will save time and also about Rs400 to Rs500 per sq. ft for end users,” he explains.

ROADMAP FOR GROWTH

Akshaya recently launched its 151st and also its largest development project, ‘Today’ in OMR near Chennai, which will have 2,134 units. The project sold a record 1,021 units on the launch date itself with sales revenue of Rs. 440 crores. Akshaya was among the first few companies to launch new projects in OMR. Today, it has over 11 projects in the region.

Restless and always looking for newer opportunities, Chitty Babu has an ambitious roadmap for Akshaya with plans to spread its wings to Coimbatore, Hyderabad, Trichy, Bangalore and Cochin with a marketing office currently in Dubai. When asked about his favourite project, he quips, “I believe my best is yet to come.” In 2010, Construction Week had identified Akshaya as one of the fastest growing real estate companies in India.

“Our mission for the company is to reach a turnover of Rs. 1,000 crores by 2015,” shares Chitty Babu. “It is the passion to create something completely new and different for the city that keeps us motivated to grow,” he signs off.

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