How Irfan Razack built a $6-billion fortune with Prestige Estates Projects

The company’s stock has been on a tear, closing at ₹1,870 in late September, up 58 percent in 2024 and more than triple its year-ago level. The rising share price boosted the wealth of Razack and his siblings to $6 billion, earning them a spot, after a decade-long hiatus, in the ranks of India’s 100 Richest, a list that features half a dozen other multibillion dollar property fortunes this year.

Prestige’s growth has been fuelled in part by India’s red-hot real estate market, which is benefiting from increasing urbanisation, an infrastructure buildout and the trend to invest in property. The country’s property sector could potentially increase tenfold to $10 trillion in asset value and that of related services by 2047 from under $1 trillion today, according to a September report by real estate consultancy firm Colliers and the Confederation of Real Estate Developers’ Association of India.

Razack had long harboured the dream of expanding into Mumbai. But it took a confluence of factors to pave the way for his entry. India’s real estate reforms of 2016 ushered in long-demanded transparency and accountability. The opportunity to pick up sites arose when rising funding costs precipitated a liquidity crunch and project delays, compelling distressed developers to undertake a fire sale of their land parcels. The auction of sites entangled in legal disputes and the growing trend of redevelopment, wherein older buildings are torn down and rebuilt, provided other openings, albeit with some element of risk.

Prestige acquired certain prime land parcels from prominent developer DB Realty, whose two former billionaire co-founders were embroiled for years in a telecom scandal. While they were acquitted for lack of evidence after seven years, DB Realty’s projects stalled. 

“The sites that Prestige took on were available to everyone, but Razack decided to take the risk and that’s what distinguished him from the rest,” says Anuj Puri, chairman of Mumbai-based Anarock Property Consultants. (It has Prestige as a client.) “He partnered with the right people on the ground to get approvals and land clearances,” adds Puri.

Prestige Ocean Towers in South Mumbai Image: Courtesy Prestige Estates Projects

Razack also worked hard to woo Mumbai’s brokers and their agents. In 2022, he flew 200 of them to Bengaluru for a weekend primarily to showcase Prestige’s marquee projects and buildings. “We felt they would get a brand attachment only if they could see our products,” says Zayd Noaman, Prestige’s executive director and Razack’s nephew (he’s the son of his younger sibling Noaman). That was a precursor to a pre-launch event held in May 2022 on the grounds of Mumbai’s racecourse for 2,500 realtors, giving them a sneak peek of Prestige’s upcoming projects followed by dinner.

Today, Prestige has its own team of 150 sales people in Mumbai and has expanded into the neighbouring city of Pune, a rising tech hub, with a million square feet of commercial space, as it scouts for land for residential projects. Razack insists that Prestige has retained its focus on providing mid-income housing. “We operate in the ₹75 lakh [$90,000] to the ₹2 crore [$240,000] segment for Bengaluru and the ₹2 crore to ₹3 crore [$360,000] segment for Mumbai,” says Razack. “That mid-income segment is our bread and butter.”

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Razack’s moves seem to have won over investors, with most analysts having a “buy” recommendation on Prestige’s stock. “They have been very aggressive in terms of growth and they have delivered very well,” says Pankaj Kumar, research analyst at Kotak Securities in Mumbai, which rates Prestige’s shares as an “add”. Says Kumar: “This is a company with a high sales velocity. They build quickly and they sell quickly.”

Prestige faced a reality check in the quarter ended June, with sales falling 23 percent from a year earlier to ₹30.3 billion even as debt piled up to nearly ₹82 billion. Unfazed, Razack attributes the sales dip to a delay in securing approvals and a slowdown in project launches during the weeks-long national elections held earlier this year. Despite that, he noted in a statement announcing the quarterly results, “We still crossed a commendable sales figure of ₹3,000 crore [$360 million].”

For the current fiscal, Razack has set the target of a 30 percent sales increase and is confident of meeting it. “I don’t have any doubts about this,” says Razack. “It’s very easily doable. But it requires a lot of focus.”

With 300 completed projects under his belt, Razack believes that he’s poised for the biggest leap in his career with a $7.2 billion project pipeline. Prestige has 92 million square feet in ongoing projects, the most among listed peers. And it has 91 million square feet in planned projects for which approvals are pending, the second-largest among listed peers. Says Razack: “We’re pouring 65 million tonnes of concrete across different projects.”

UB City in Bengaluru was Prestige’s first high-end mall Image: Frédéric Soltan/Corbis Via Getty Images

One consequence of Prestige’s blistering growth is the company’s ballooning debt, which is the highest among listed peers. While Razack says that a debt-equity ratio of 0.68 is manageable, he’s taken steps to shore up capital. The company raised ₹50 billion in August from a private placement of equity to institutional investors, which will be used partly to pare debt. Earlier in April, Abu Dhabi Investment Authority and Kotak AIF, a fund under a subsidiary of Kotak Mahindra Bank, agreed to invest ₹20 billion in four residential projects in Bengaluru, Goa, Mumbai and the National Capital Region (NCR), which encompasses Delhi. Three years ago, Razack had reduced escalating debt by selling a portfolio of Prestige’s commercial assets to US private equity giant Blackstone for over $1.2 billion.

While Prestige is predominantly seen as a builder of homes and offices, it expanded into the hospitality sector in 2001 with a five-star resort and spa in Bengaluru that is managed by Singapore’s Banyan Tree Hotels & Resorts. Since then, it has grown the portfolio to nine hotels with Marriott International managing five of them in Bengaluru and Kochi. There are plans to add six more under various Marriott brands in Bengaluru, Mumbai, NCR and Goa over the next five years. Razack is gearing up to list the hospitality business after securing board approval in June for an IPO. 

Another buzzing segment is malls—Prestige opened Bengaluru’s first one, the Forum Mall, two decades ago. Razack successfully lobbied the local government to amend a law that required cinemas to be located at ground level, securing permission to place a cinema multiplex on parts of the third and fourth floors. In 2008, Prestige opened its first high-end mall, UB City in Bengaluru. The company now operates five malls and is looking to build 10 more, from Chennai to Goa. 

“Prestige has a meaningful presence across all asset classes—be it residential or office or retail or hospitality,” says Zayd Noaman. “We also have the ability to execute across different regions.”

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Now Razack is working on Prestige’s next big expansion into the Delhi National Capital Region (NCR). The company is building an integrated township that includes residences, schools and hospitals with a gross development value of about ₹100 billion, on a 25-hectare plot in Ghaziabad, a Tier II city. Prestige is also building a residential complex, a trade centre and two hotels in different Delhi neighbourhoods. Another residential project has been earmarked for Noida, just outside Delhi.

“Delhi NCR is challenging as a market because of the continued increases in property prices,” notes Ajay Sharma, managing director (valuations) of Colliers India in Mumbai. (Prestige is a Colliers client.) “New entrants need to be cautious given the cyclical nature of the market.”

A looming question is whether the property market joyride is sustainable. “There’s nothing on the horizon to suggest a slowdown but we do need to see if the current growth will be sustained,” says Sharma of Colliers. “For Prestige, the next three or four years will be crucial to build self-sustaining cash flows,” says Parikshit Kandpal, senior analyst at Mumbai-based HDFC Securities. “It all depends on how much capital they can bring in.”

Another challenge for Prestige, says Zayd Noaman, is to “ensure that we keep executing without faltering and without delays”. To make certain that deadlines are met, the company retains several functions in-house, from project and construction management to interior design and landscaping; it even manufactures doors.

The family’s entrepreneurial roots date back to 1956 when Razack’s father, Sattar Razack, opened a men’s garments store, making bespoke shirts, trousers and business suits, in Bengaluru. Razack and his two younger brothers joined the family retailing business after college. They veered to real estate in the 1980s when Razack sold the family house and started trading in real estate—buying and selling land. He also did a joint commercial development with his father-in-law.

In 1986, the three brothers and their father set up Prestige Estates and Constructions with seed capital of ₹40,000 (the equivalent of $3,250 at the time). The first project was a 10,000-square-foot office building, then larger projects followed. As Bengaluru morphed from a sleepy town into India’s gleaming tech capital, Prestige flourished as it built homes and offices for the growing tech crowd.

Kingfisher Towers in Bengaluru Image: Courtesy Prestige Estates Projects

Razack says he chose the falcon as the company logo as it denotes agility, grace and speed. A statue of the bird adorns his office desk. And the company’s Bengaluru headquarters is housed in a building called Prestige Falcon Towers. Razack went on to list Prestige in 2010, raising ₹12 billion in an IPO oversubscribed 2.3 times. Over the next few years, the company constructed several iconic buildings in Bengaluru’s luxury residential market, including Kingfisher Towers, where the city’s uber-rich own luxury pads.

Razack prefers dealing with a few handpicked landowners on multiple projects. For example, Prestige is co-developing 20 million square feet in Bengaluru with a single landlord. “We’ve never chased land,” asserts Razack. “Land has always chased us,” he says, referring to being courted by landlords looking for a development partner. “He is a great dealmaker,” says HDFC Securities’ Kandpal. “He has an eye for catching trends. His cost of land acquisition is also the lowest among peers.” 

Despite Prestige’s growing footprint, Razack maintains a firm grip on details. “In this business you have to be hands-on,” he says. “You can’t just sit in your air-conditioned office and expect things to happen. They won’t.” His weekly schedule includes two days of visiting Prestige’s construction sites. He’s usually accompanied by his brother Rezwan, who is joint managing director, and nephews, Zayd Noaman and Faiz Rezwan, an executive director in charge of contracts and projects. 

While Razack is making efforts to groom the next generation, it’s not yet clear who might eventually succeed him. Ten family members—five from the next generation, including his daughter Uzma—work in different parts of the business. For leisure, Razack prefers adrenaline-pumping activities. He’s bungee jumped and climbed glaciers. In 2017, he went skydiving near Las Vegas during a US roadshow when he said to nephew Zayd: “Skydiving is on my bucket list—if you go, I’ll come.” 

Razack also enjoys long-distance driving—he’s driven through North America, South America, Europe and Australia as well as navigated India’s Atal Tunnel, the world’s longest high-altitude tunnel (nine kilometres at 3,048 metres) in the Himalayas. 

The chairman says these drives give him time to ruminate. His philosophy? “You have to be open to everything… you must have a totally open mind.”