Altico to deploy $150 mn in office properties

Plans to deploy the funds apart from the $400 million infusion in mid-income and affordable housing segments

Non-banking financial company (NBFC) Altico Capital is looking to deploy $150 million (Rs 990 crore) over 12-18 months in commercial office properties and the infrastructure sector.

This is besides the $400 million it is looking to deploy in mid-income and affordable housing segments, said Sanjay Grewal, chief executive officer at Altico Capital. The NBFC is promoted by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners. “Altico plans to focus on extending credit to promoters, who have a track record of developing and leasing office space for early stages of development and construction financing as opposed to the late-stage lease rental discounting transactions,” Grewal said. Altico’s rival Piramal Capital is also looking to deploy Rs 5,000 crore in Bengaluru and Mumbai.

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Altico would raise Rs 2,000 crore through a mix of instruments and funding sources including bank lines, commercial paper and non-convertible debentures (NCDs). It has also appointed Dhruv Jain as its chief financial officer. Jain was earlier with Milestone Capital.

Last week, Altico said it had invested Rs 575 crore in real estate projects in Mumbai, Pune and Bengaluru. It had entered into a multi-project financing arrangement with Marvel Developers, in Pune. Additionally, it concluded a second transaction with the Midcity group, a developer focused on society redevelopments in Mumbai. It also closed its third transaction in Bengaluru, financing Unishire against a portfolio of five projects.

Altico's average size is Rs 150 crore, but it would also like to do deals of Rs 200-300 crore. “We would want to have a loan book of $1.5 billion by FY20 and $1 billion by FY18," Grewal had told Business Standard recently.

Private equity firms have set up a number of real estate-focused NBFCs in the past couple of years that compete with each other. Piramal Fund Management, Xander NBFC and the NBFC floated by KKR along with Singapore sovereign wealth fund GIC are some of the prominent ones in this space. Real estate accounts for 17-20 per cent of their deals. 

"There is a requirement of $15 billion of funds in real estate every year and scope for everybody," Grewal said.