Piramal Finance, a subsidiary of Piramal Enterprises, has formed a separate vertical with the purpose of making investments in affordable and mid-income residential projects in the top metros across the country. It has identified an initial pipeline of Rs 3,000 cr with transactions across the major metros and these are currently under active consideration.
“We now have a highly experienced team focused exclusively on scaling our presence within this segment and intend to scale up to $2 billion by 2020. Deals for around Rs 3,000 cr will be concluded over the next one year,” said Khushru Jijina, Managing Director, Piramal Finance.
The investments would be made in equity and structured debts to help finance developers and their projects in this segment. The new vertical will focus on pure and preferred equity transactions in affordable and mid-income housing projects on peripheral locations of Mumbai, National Capital Region, Bengaluru, Pune, Chennai, Kolkata, Ahmedabad, Kolkata and Hyderabad.
Currently, it is in discussions with developers in property markets of peripheral locations of Mumbai, Bengaluru, and Chennai. Jijina is expecting to seal at least 2-3 deals over the next three months.
In order to provide comprehensive financing solutions to real estate companies, Piramal has formed strategic alliances with global funds such as APG Asset Management, Bain Capital Credit, CPPIB Credit Investment Inc. and Ivanhoé Cambridge (CDPQ). To achieve its target of scaling up the new offering, Piramal Finance may also leverage its alliance with Ivanhoé Cambridge.
“While many players in the market are focused on providing equity or debt capital towards affordable and mid income housing, we believe that our ability to provide a comprehensive end-to-end solution – including both early stage equity as well as construction linked debt – is truly unparalleled as it helps the developer achieve financial closure for the project on Day Zero,” Jijina added.
With this new offering, Piramal Finance will be able to facilitate financial closure for the project, as well as home finance for end users. The division's Corporate Finance Group provides senior and mezzanine growth capital to businesses across various sectors. It has also launched a Distressed Asset Investing platform to invest in equity and or debt in assets across sectors other than real estate. The total funds under management under all these businesses are over $5.5 billion.