Piramal Group's financial services arm Primal Fund Management (PFM) has surpassed Rs 10,000 crore in aggregate investments in South India, the company's proprietary book stated.
This forms one third of the firm's commitment to clearing Rs 32,000 crore debt and equity to real estate developers
According to Piramal, the Rs 10,000 crore milestone was aided by a focused approach in treating Bangalore, Hyderabad
and Chennai as a single region, where synergies were drawn with tier 1 developers
from existing and new relationships, besides leveraging Piramal Fund's ability to sanction large deals across the capital stack.
"Piramal Fund Management
is committed to enabling liquidity in the ecosystem and as markets consolidate, we will extend our partnerships in South India
by underwriting multi-city relationships with tier 1 developers.
We have consistently increased our exposure across Bangalore, Chennai and Hyderabad
over the past few quarters. Consolidation is a healthy sign which will make the end users recognise tier 1 developers' track record and execution capabilities," said Khushru Jijina, managing director, PFM on Tuesday.
According to Jijina, the fund's Hyderabad
portfolio was growing at an impressive pace on the commercial real estate front, after PFM re-entered Hyderabad's market a year ago.
PFM's exposure in the south extends to residential as well as commercial segments, including a recently launched flexible Lease Rental Discounting (LRD) product and the customised funding for plotted land developments.
The first phase of Piramal's preferred partner programme, under which a credit line of Rs 15,000 crore was extended for selective development, has been utilised by 50 per cent at present. The second phase of the programme is likely to be launched in the upcoming financial year targeting, among others, selected developers
in the southern region.
Around 50 percent of the utilised line of credit under the partner programme comes from Bangalore
and Hyderabad, the company said.
According to the PFM, the company's three-fold strategy to expand its product offerings, portfolio companies
and geographical reach, has enabled a steady growth of more than 80 percent CAGR in the last two years.
A number of tier 1 developers
such as Prestige, Purvankara, Salarpuria and Mantri, have forayed into Chennai and Hyderabad.
In what appears to be the next logical step, the PFM is actively underwriting transactions with exisiting developers
from tier 1 cities across multiple projects.
Some of the major deals signed in the region inlcude a Rs 1,000 crore project with the Adarsh Group and a Rs 1,050 crore deal signed with the Ozone Group. Piramal Enterprises has recently reported a consolidated revenue of Rs 1,936.4 crore for the second quarter that ended on September this year, while accruing a net profit of Rs 254.36 crore in the same period.