Chennai : Kasturi & Sons Ltd (KSL), which runs The Hindu and Business Line, last September decided to diversify into real estate advisory as a pilot and was helping buyers to discover new homes. Encouraged with the response, it has decided to become a one stop shop and will offer end to end solution for buying a house and also offer services after buying the house.
KSL’s MD & CEO Rajiv C Lochan, who joined KSL from McKinsey & Company last year, said the new subsidiary can potentially bring more revenue than the publications are clocking currently.
At a time when the media industry is slowing down, which in turn has impacted The Hindu and other publications businesses, KSL roped in McKinsey to advise for transformation. One of the recommendations of McKinsey was to diversify and use digital classified space broadly. The Hindu brand has three or four verticals and the real estate platform will probably be the biggest since Property Plus is well known, said Lochan.
A new subsidiary, KSL Digital Ventures Ltd, was floated. Under which RoofandFloor.com, a real estate property portal, was started.
It was the only investment made outside of back end content management system by KSL last year. In September 2014, RoofandFloor was launched in Chennai and was expanded to another seven cities including Bengalaru, Hyderabad, Madurai, Tiruchy, Coimbatore, Vijaywada and Kochi.
“We are number three property portal behind magicbricks.com (a division of Times Internet Limited, a wholly owned subsidiary of Bennett, Coleman & Co. Ltd which competes with KSL and its publications) and 99acres.com in terms of revenue,” said Lochan, adding that unlike competition RoofandFloor don’t do resale, rental, paying guest, but focus only on new properties.
The portal started with a focus to help the buyer to discover the property and now moving to be an end to end solution provider including discovering the property, due diligence, taking care of legal issues, arranging finance etc., and even post purchasing interior decorations, carpentry etc.,
Currently the portal revenue is listing fee, paid by real estate developers and if a buyer wants to avail service post discovery it would charge the buyer.
“We are looking at 5-8 per cent of the property cost as our revenue,” said Lochan, who eyes 30 per cent market share in the current unsold inventories in Chennai. The brand would focus on the cities where the brand The Hindu has a strong base, he said.
“It (revenue of RoofandFloor) could be bigger than Kasturi & Sons in the coming years,” said Lochan, who expects around Rs 75-100 crore revenue run rate after 18-24 months. So far around Rs 15-20 crore was invested and company hopes to multiple it in the coming months. The company also said going forward it may open doors for outside investors.
Gowri Shankar Nagarajan, former product head of Inmobi has been appointed as the COO of the RoofandFloor. The company is also in the process of creating a Road Map 2020 for the subsidiary, which can potentially look at diversifying areas including Events and Expos, Education and Sports.