Time magazine profile of DLF chairman K.P. Singh

If you listen to Singh tell it, DLF is doing just that. Barely known outside its north Indian base a few years ago, the company is building houses, apartments, office towers and shopping malls across India. It has plans for airports, hotels and cinemas. Singh, 75, doesn't just want to cash in on India's economic boom, he wants to be a prime mover in the country's drive to erect modern cities where India's new middle class can live, work, shop and play. To do all that, though, DLF needs a lot more money, which is why on July 5 the company listed on the Bombay and National stock exchanges. An initial public offering for just over 10% of the company closed in mid-June and brought in some $2.24 billion. In the three weeks after it listed, DLF's shares rose nearly 9%, giving it a market capitalization of $24.5 billion — roughly $3 billion more than General Motors. The IPO, which was about twice the size of India's previous biggest, netted Singh and several family members, who together hold 87% of DLF, nearly $20 billion — enough to make them one of the richest clans in the world. "Frankly that is embarrassing to me," Singh says. "That is not the yardstick by which I want to be known. I feel proud that what I championed 25 years back has blossomed into something good for the country. That is what I want to be known for."

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Considering the challenges, it's hard to see how DLF's spectacular growth rate can be sustained for long. In its fiscal year that ended March 31, 2007, DLF reported that its profit grew by more than 1,000% to $470 million, while sales tripled to just under $1 billion. That record is fully reflected in the stock price, says Mukesh Agarwal, a manager at Indian financial-services firm HDFC Securities. "Since we have already had a stupendous run-up over the past two years, prices have been fully factored in," says Agarwal. "The upside may be limited."

Singh doesn't see it that way. "Urban development in India ... will be the biggest sunrise industry that any country has seen in any part of the world," he says. "And this is going to be a long haul, not three or four years but 20 years or more." The trend is being driven by macro forces, such as the country's demographics, that aren't usually taken into account by stock analysts, he says. Not only will India pass China as the most populous nation on the planet in a couple of decades, its citizens are a lot younger than its rival; one in three Indians is currently younger than 15. As the country becomes richer (with a little help from the strengthening rupee, India became a $1 trillion economy in late April) and more urban (the number of people living in cities will rise to 461 million by 2025 from 286 million today, according to the Asian Development Bank), demand for housing should go right on booming. Already India's Ministry of Housing and Urban Poverty Alleviation puts the shortage of homes at 25 million.

As its economy grows, India will need millions more square feet of offices as well. Industry analysts estimate India has less modern urban office space than a single large American city. India's infrastructure demands, too, should keep plenty of companies in business. The government estimates the country needs $320 billion of investments in roads, ports and bridges by 2012. "It's not a bubble," says Arjun Divecha, the California-based manager of investment firm GMO's $15 billion emerging-markets fund. "In India the reason why prices have risen so rapidly is because there has been so little increase in supply. If you look at the experience of other emerging markets, the real wealth escalator has been real estate and I expect the same in India."

So does Singh, who laments that in its first 60 years, India's philosophy was to "think small, make small buildings and never to think that we could make bigger things, better things." He pauses for a second, looking old when he stops, but animated and younger as soon as he begins talking again. "I ask you, why can't we be excellent?"