IIFL and Edelweiss Group are planning to invest in the projects of Mumbai and Bengaluru
IIFL and Edelweiss Group planning to buy bengluru projects
In the very first transaction, IIFL is planning to lend Rs.500 crore to Ariisto Realtors in the form of structured debt. IIFL Group, which is one of the largest financial services firm has made two big investments one by one in the different real estate projects which are located at the Mumbai and Bengaluru and it is expected that this investment will help the real estate developers to start he projects and refinance the existing the loan, as per the statement of the executive of company.
Investment with Ariisto Realtors:
In the very first transaction, IIFL Group lends Rs. 500 to Ariisto Realtors in the form of structured debt for the residential project which is coming up at Kandivali, a western suburb of Mumbai. Apart from that it is expected that real estate developer will use some of the working capital to partially refinance loans of HDFC Portfolio Management Services, a part of HDFC Asset Management Co. Ltd. and Piramal Fund Management Pvt. Ltd, who are existing investors. Till now out of Rs.500 crore, IIFL has already disbursed the amount of about Rs.370 crore. It was the second deal of IIFL with Ariisto, however; the first deal of IIFL was very small with the amount of Rs.80 crore in 2014.
According to Balaji Raghavan, Director of IIFL Realty Ltd, which is a subsidiary of IIFL Group, “It is an early-stage transaction and the project is about to take off”. However; Hiren Patel, the Executive Director of Ariisto Realtors stated that “Our Company has more than 19 residential projects in various parts of Mumbai”. The more he added that the Kandivali project has two and three bedroom apartments and currently project is in the process of procuring approvals. We are planning to use that money for the project development and it will help us to repay the Piramal and HDFC Portfolio Management Services”.
Investment with Manyata Promoters:
In the second transaction, Edelweiss Group, which is also financial services company and IIFL jointly lend around Rs.725 crore to Manyata Promoters, which is Bengaluru based real estate developer and landowner. As senior lender Edelweiss will about Rs.450 crore and rest Rs. 275 crore will be given by IIFL. In September, the IIFL Group and some of its wealthy clients have invested Rs.300 crore in the real estate projects which are located at the western Mumbai suburb of Borivali is under construction by Radius Developers in partnership with Deserve Builders and Developers Ltd. IIFL Group and its non-banking financial arm as well as its private equity arm is actively investing in the real estate projects.
The partnership between IIFL and Edelweiss is another instance of investors such as; non-banking financial companies (NBFCs) and private equity (PE) funds have join the hands for big-ticket transactions while hedging risk in a sluggish market. While confirming the transaction, Sanjeev Rastogi, Executive Vice-President of ECL Finance Ltd, the NBFC arm of Edelweiss Group stated that the debt has been given for working capital and refinancing purposes. Manyata Promoters, which is also the shareholder in Embassy Manyata Tech Park, a prominent information technology (IT) special economic zone (SEZ) located at Bengaluru with investor Blackstone Group Lp and realty firm Embassy Group will use the money for two of its new plotted development projects.
According to Raghavan¸ it was best deal in which both IIFL as well as Edelweiss were interested, but requirement was larger than what we would have individually been able to do., so both firm decided to share a comfort level with joint effort. According to Shashank Jain, Partner in transaction services of PricewaterhouseCoopers India, “In collaboration may not be the norm because we are likely to see more such associations between different kinds of capital and different risk appetites.
