Altico to finance Mumbai & NCr projects for Rs. 130 cr

With a focus on senior secured lending to residential projects in the real estate sector across Tier-1 cities in the country, Mumbai-based NBFC, Altico Capital has closed two deals worth Rs 130 crore for residential projects in Mumbai and the NCR.

“We have closed an Rs 50 crore transaction with Noida-based Lotus Greens group for a residential project named ‘Arena I’, which is a part of a larger Sports City development in the city. And In the second deal, we have invested Rs 80 crore in Mumbai-based Shree Sai group for a residential project called ‘The Nest’ being developed in Andheri,” the company said in a statement.

“While the funding for the Arena-I in NCR will be utilised for construction of the project, Shree Sai will use the capital for refinancing the existing lender as well as for completing the construction of the project,” the release added.

“We are looking at last mile financing for projects in advanced stages of construction and sales,” Altico’s Chief Executive, Sanjay Grewal said, adding that the company will also evaluate and fund projects wherein corporate houses like  Godrej have tied up  under joint development arrangements  with existing land owners and developers to market and construct projects under their corporate brands.

Altico Capital to finance 450 cr project in Mumbai

The non-banking financial company (NBFC) of Asia-focused investor Clearwater Capital Partners LLC, Altico Capital India Ltd. Has given Rs.450 crore of debt financing to an upcoming residential project in Mazgaon, south Mumbai.

The project will be a joint venture of Radius Developers and Sumer Group which is yet to be launched.  Under the plan, five 65-storey residential towers measuring 3 million sq. ft of saleable area will be developed.

The transaction is structured in the form of non-convertible debentures (NCD) with a four-year tenor, where the funds will be disbursed in tranches. The finance will be used to acquire the project from the land owner, settle tenants on the land and to start project construction.

Funding to the realty sector in the past three years has largely been in the form of structured debt financing, with both private equity (PE) funds and NBFCs aggressively lending to developers, giving the latter a much-needed source of capital especially when cash inflows have dried up due to weak sales.

“This was an exciting opportunity to back one of the most promising real estate entrepreneurs in Mumbai early in his new corporate evolution,” said Karthik Athreya, managing director of Altico Capital. “Our business is built around the significant existing opportunity to meet the capital needs of capable developers, who are in their growth stage with multiple projects that can enable their own growth besides repaying our debt at attractive IRRs (internal rate of returns) of over 18%,” he added.

Speaking on the deal, Sanjay chhabria, Managing Director of Radius Developers said, “We plan to launch the project early next year. The property is at a great location in south Mumbai and is ideal for residential development.”

Structured debt transactions in real estate are getting larger, sometimes with PE funds and NBFCs collaborating to do bigger-sized deals to meet developers’ demand for capital.