Mahindra War Room 2015 Realty & Infrastructure Business Caselet

Broadvision Perspectives Client Confidential Page 1 of 3

MAHINDRA REAL ESTATE SECTOR: GREEN FIELD OPPORTUNITY IN SMART CITIES CASELET

Mahindra’s real estate & infrastructure business consists of the residential business under the brand name “Mahindra Lifespaces” and “Happinest” and the integrated cities and industrial clusters business under the brand name “Mahindra World City”. This is the only caselet from the Mahindra Real Estate Sector.

BUSINESS BACKGROUND

Mahindra Group entered the real estate business in 1994, with the dream of transforming the way India thinks about living and work spaces. Mahindra Lifespaces is reputed for enhancing living standards and pioneering environmentally friendly construction in India. With over 8.9 Million Square Feet of completed Constructions, and 10.38 Million sq. ft under development across Mumbai, Pune, Delhi, NCR, Hyderabad, Chennai and Bengaluru, Mahindra Lifespaces has demonstrated that sustainability and good living go hand in hand. A pioneer in the Green Design-Healthy Living philosophy, Mahindra Lifespaces was among the first companies to receive the Platinum rated green homes pre-certification, and all their residential projects are pre-certified green buildings by IGBC.

Mahindra Lifespaces has pioneered the concept of an integrated business city through ‘Mahindra World City’ developments in Chennai and Jaipur. These developments cover 1796 hectares (4,437 acres) and house over 125 reputed global companies, providing an integrated environment for Life, Living and Livelihood. The Company’s ‘Green’ homes, pan-India presence, and the development of successful integrated cities have all contributed to Mahindra Lifespaces being recognized as a developer with a pioneering spirit. Mahindra Lifespaces is the first real estate company in India to release its triple bottom-line focused Sustainability Report that is based on the Global Reporting Initiative (GRI) framework and received an A+ rating indicating the highest levels of disclosure and transparency. LIVE CHALLENGE: GREEN FIELD OPPORTUNITY FOR SMART CITIES

Smart Cities are the buzzword of the country now. The Government of India’s announcement to create 100 Smart Cities across India through Public-Private Partnerships has captured the imagination of the world. Currently, 31% of India’s population lives in her cities, contributing to 63% of the nation’s economic activity. These numbers are rapidly increasing, with almost half of India’s population projected to live in her cities by 2030. Proper planning of urban infrastructure in these cities is very essential to ensure a good quality of life of India’s citizens. Improper planning may lead to increase in slums, traffic congestion, pollution, poor waste disposal and the possibility

Mahindra War Room 2015 Realty & Infrastructure Business Caselet

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of epidemic outbreaks. The Government of India aims to pre-empt these problems and take the leap to create next generation infrastructure across 100 top cities, to ensure quality of life and economic development.

During April 2015, the Union Cabinet cleared the proposal to invest in creating 100 smart cities across India. A new urban renewal mission, with an outlay of INR. 98,000 crores over the next 5 years - INR. 48,000 crores under the Smart Cities Mission and INR. 50,000 crores under AMRUT, will lay the foundation to enable towns with a population of 1 lac and above to grow into smart cities. AMRUT will focus on ensuring basic infrastructure services such as water supply, sewerage, storm water drains, transport and the development of green spaces with special provisions for meeting the needs of children. The Smart City Mission, on the other hand will focus on large cities.

In the first step, the Government of India will throw a ‘City Challenge’ competition , where each state and Union Territory will shortlist a certain number of smart city aspirants as per the norms indicated. Selected cities will get Central assistance of INR. 100 crore a year for the next 5 years, with additional funding to be raised by the respective state government. The Smart City action plan will be implemented through a Special Purpose Vehicle for each city. The focus will be core infrastructure services with adequate clean water supply, sanitation, solid waste management, efficient urban mobility and public transportation, affordable housing, power supply and robust IT connectivity. E-governance, Citizens participation, safety and security, health and education and sustainable urban environment will also be emphasized.

On 26th June 2015, the Government of India has released their white paper on Smart Cities, which articulates its vision and framework to go about developing the 100 smart cities across India. The document can be downloaded here: http://smartcities.gov.in/ writereaddata/SmartCityGuidelines.pdf

The vision and commitment shown in the Smart Cities Initiative is opening up a new opportunity for Mahindra Real Estate Sector. Being a market leader in developing integrated business cities, green homes and urban infrastructure, Mahindra Group has the capability to pursue this opportunity, but is considering doing so as a Green Field business, rather than inside one of the existing businesses. Mahindra is considering an integration project where the relevant capabilities to create a Smart City resident across group companies such as Tech Mahindra, Mahindra Consulting, Mahindra Susten, Mahindra Reva and Mahindra Water Utilities Limited will be integrated into a separate new Smart City Vertical, envisioned as a hybrid of a Consulting Firm and an Infrastructure_Firm.

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In the world of Infinite Possibilities, is there an Opportunity for the Mahindra Real Estate and Infrastructure business to bring together these capabilities resident within the group, and create a large business. Can there be an unique value proposition that can be taken through this integrated approach to the Smart City aspirants in a B2G model. Is this opportunity for real? What is the size and scale of this opportunity, and what are the capabilities and challenges involved. Which part of the value chain in the B2G framework should Mahindra play in – consultants, program manager, applications service provider, EPC, integrator, monitoring agency, etc. What can Mahindra learn from the evolution of Smart Cities in the United States? Evolve a business plan and a roadmap for Mahindra Real Estate Sector to realize the potential in the Smart Cities opportunity.