OverviewAgrawal Wood Tree High DemandDepleted SupplyProject DetailsProject Returns Risks and Safeguards
Rajnish Estates will be planting 50 Sandalwood Trees, 50 Agarwood Trees and 20 Rosewood Trees in an 8000 Sq ft plots. The Agarwood plantation will be harvested in 10 Years, Sandalwood plantation in 15 Years and Rosewood plantation will be harvested in 20 years.
The buyers can expect a return of Rs. 4.8 crores starting from 10 Years. In case they earmark 1200 Sq.ft for their villa plot they can expect a return of Rs. 4.5 crores.
The current price of Sandalwood is averaged at Rs. 10,000 per Kg and the average weight of the tree is 30 Kilograms.
There are approx. 50 Sandalwood Trees planted in an 8000 Sq.ft Plot.
A plantation planted 15 Years ago would be worth approximately Rs. 1.25 Crores if harvested today.
The price of sandalwood has risen 10 times in the last 10 years. We assume that the price of sandalwood will increase minimum 5 times in 15 Years.
The sandalwood trees will be cut after 15 years which means that the value of the plantation after 15 years would amount to Rs. 6.21 Crores
As the revenue will be split equally between the Buyer and Rajnish Estates, the Buyer can expect to earn Rs. 3.21 Crores and Rs. 3 Crores with the Villa Plot as shown in the Investment Return Matrix
Similarly the Buyer can expect to earn Rs. 1 Crores from the Agarwood Plantation and Rs. 82 Lac with the Villa Plot as shown in the Investment Return Matrix.
Similarly the Buyer can expect to earn Rs. 75 Lacs from the Rosewood Plantation and Rs. 71 Lac with the Villa Plot as shown in the Investment Return Matrix.
Investment Return Matrix
|Investment Amount to purchase 8000 Sft. plot||
Starting Rs. 15 Lakhs
|Current Price of the Tree||
|1 Lakh||2 Lakh|
|Number of Trees planted||
|Current Plantation Value (Rs.)||
|Assumed Price increase upon Harvesting||
5 Times the Current Price
|4 Times the Current Price||
5 Times the Current Price
|Expected Price upon Harvesting||
|2 Crores||1.5 Crores||
|Buyer’s Share (Rs.)||
|1 Crore||75 Lacs||
|Buyers Share with Villa Plot of 1200 Sq. ft||
|82 Lacs||71 Lacs||
The revenue is directly proportional to the number of plots bought by the buyer.
- The villa plots can be bought by any Indian citizen. For Non resident Indians, the plot can be converted into ‘Residential’ and can be duly purchased by them.
- The buyers can advise the Villa plot size required by them and the plantation returns will vary accordingly.
- The number of Agarwood and Sandalwood Tree mix can be mutually decided by buyer and Rajnish Estates e.g. the buyers can expect a higher return if they plant more Sandalwood Trees instead of Agarwood Trees but will have to wait for 15 years instead of 10 Years for the plantation returns.
- We have to sell the Sandalwood Trees to the Govt. of India and take permission to harvest Rosewood Trees. There is no permission required for harvesting Agarwood Trees.
- The buyer can sell the villa plot and plantation or both separately. In case the buyer wishes to sell the plantation, the new buyer also has to sign a similar lease agreement which the buyer has signed with Rajnish Estates.