Bengaluru: Altico Capital India Pvt. Ltd, a non-banking financial company (NBFC) backed by Asia-focused investor Clearwater Capital Partners LLC, has invested Rs500 crore in three residential projects of Mumbai-based Nirmal Group. The money will be used to refinance some loans and for construction.
The projects against which Nirmal Group has raised the money include one with three condominium towers named Amethyus, Zircon and Turquoise; a residential project named One Edition in suburban Mulund; and an early-stage project near Thane.
The developer will also refinance loans from Capital First and Piramal Fund Management Pvt. Ltd, among others.
“We have structured the financing of the transaction in a way that it involves both early stage and late stage projects. Most of these projects are 85% complete and 50% sold; so, the capital will give the pace of construction a boost, which will eventually also drive sales,” Altico Capital chief executive Sanjay Grewal said over the phone.
In a statement, Altico Capital said the projects being financed have a total saleable area of about 2 million sq. ft. Of this, about 1.25 million sq. ft is in advanced stages of construction.
With builders under stress following a three-year slowdown and banks wary of lending to them, NBFCs have stepped in, keen to address the funding gap in the sector. However, though private equity funds and NBFCs are keen to invest, the money that is coming in is largely in the form of debt and refinancing and not growth equity.
“Residential sales have been slow but we are closely monitoring the market, and have seen some improvement in the last two months. We believe that it will get better over the next two quarters,” Nirmal Group chairman Dharmesh Jain said. “The money raised from Altico will help us finish the ongoing projects as well as fund new projects that we plan to launch soon.”
Earlier this month, Altico Capital invested Rs300 crore in a residential township in Pune being developed by Pune-based Kumar Urban Development Pvt. Ltd, where the developer will use the money to refinance its existing loans, allow current investors to exit the project and finance construction.
It also entered into a multi-project financing arrangement with Marvel Developers with an investment of Rs240 crore and invested Rs180 crore in the Pharande Group to part-refinance an existing loan and fund construction.
Altico, which is also backed by Varde Partners Inc. and Abu Dhabi Investment Council, intends to deploy around Rs3,000-4,000 crore in residential and commercial projects on an annual basis, depending on the right opportunities.
