Engine noise aside, the most exciting thing about the first Indian Grand Prix this Sunday may be its effect on the Jaypee Group's bottom line.
In a fascinating article, Forbes India's Abhishek Raghunath and Ashish K Mishra lay out the stakes. Sitting on debt of more than $8 billion, the Jaypee Group has little chance of turning a profit from India's first Formula One race in the short term, but the event is geared at publicizing an even larger gamble: A purpose-built "sports city" slated to house more than a million people in some 250,000 houses -- the largest residential project in India to date. According to the writers, the project will bring Jaypee $30 billion in real estate revenue if they can pull off the plan.
So can sports form the centerpiece of a residential development in fitness-challenged India? So far, few companies have set up operations in Greater Noida -- about 30 minutes drive from Delhi along an expressway that wouldn't seem out of place in the US. And the area has already developed a reputation for crime problems due to the isolated nature of the early-bird residents.
F1 is not the only real estate play though. After the GP, the Gaurs want to build a cricket stadium with a capacity of 100,000 and a hockey stadium that can seat 25,000. Again, the capital costs here are huge, but the benefits outweigh the risks. Jaiprakash Gaur is counting on the growing middle class in India and their aspirations to fulfil his dream. “Consider this. Noida grew to a population of one million in 15 years. And that was before the boom in the middle class,” says Ellis. “If India continues to grow at the current rate, Greater Noida should see a million people much quicker.”