UK-based impact investor Reall and Singapore-based hedge fund Tree Line Asia Master Fund have invested Rs 77 crore in a combination of equity and external commercial borrowing (ECB) in Bengaluru-based affordable housing developer Janaadhar India, showing confidence in the sector’s ability to deliver sustainable financial returns in the long run.
Tree Line has invested Rs 22.5 crore in equity raising its stake in the company with Reall putting Rs 49.5 crore in debt. Other existing investors have put in another Rs 5 crore between them, senior officials with Janaadhar said.
The developer would use the fund to build low-cost dwelling units in Ahmedabad. The company kept the shareholding details under wraps.
This is Reall’s first financing to an Indian developer in the affordable housing sector. Reall is backed by the UK’s Foreign and Commonwealth and Development Office (FCDO) and the Swedish International Development Agency.
The project in India will deliver over 800 climate-smart houses in Ahmedabad and has been fully certified by International Finance Corporation as green buildings (IFC-EDGE Buildings), Reall said in a social media post.
Unitus Capital advised Janaadhar on the ECB deal.
ET had in November 2019 reported the possibility of Reall’s funding in Janaadhar.
The deal, which fructified amid the Covid-19 pandemic, highlights overseas interest in the local housing space. In June, Japan’s Gojo & Company bought 16% in non-bank lender Aviom India Housing Finance to raise its holding to about 50% to support the company’s growth in affordable housing financing.
“The fresh capital infusion shows the confidence that several different types of investors have in the sectors’ ability to deliver sustainable financial returns while creating substantial impact. We expect to see several large rounds of capital being infused in the sector in the coming 12-18 months,” said Richa Natarajan, director at Unitus Capital.
Janaadhar has so far built 1500 low-cost dwelling units costing below Rs 20 lakhs across Karnataka and Gujarat.
The fresh infusion of capital will play a catalytic role in delivering homes for the economically weaker segment as well as low-income group segments, said Ragunath Srinivasan, executive director at Janaadhar.
