Piramal Finance, a subsidiary of Piramal Enterprises, has set up a separate vertical to invest in affordable and mid-income residential projects in major metros across the country. It has identified an initial pipeline of Rs 3,000 crore 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 crore will be concluded over the next one year,” said Khushru Jijina, Managing Director, Piramal Finance.
The targeted $2 billion worth of deals that would finance developers and their projects in this segment will include equity and structured debt.
The dedicated team will focus on pure and preferred equity transactions in affordable and mid-income housing projects on peripheral locations of Mumbai, National Capital Region, Bangalore, Pune, Chennai, Kolkata, Ahmedabad, Kolkata and Hyderabad.
Currently, it is in discussions with developers in property markets of peripheral locations of Mumbai, Bangalore and Chennai and of these transactions, Jijina expects at least 2-3 deals to be concluded over the next three months.
In financial services, Piramal Enterprises provides comprehensive financing solutions to real estate companies. It has 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.