Piramal lends Rs 2,000 cr under lease rental discounting scheme

It has recently approved two investments under LRD against assets in Mumbai and NCR

Piramal Fund Management (PFM), financial services arm of Piramal Enterprises, has sanctioned investments worth about Rs 2,000 crore within three months of launching lease rental discounting (LRD) for completed commercial assets that include office and retail space, it said on Wednesday.

Of this, it recently approved two investments under LRD against assets in Mumbai and in the National Capital Region. The first one is of Rs 440 crore against Wadhwa Group’s commercial property  in the Bandra Kurla Complex (BKC). The second investment is of Rs 580 crore against ASF Group’s information technology Special Economic Zone development, ‘ASF Insignia’, in Gurgaon.

Piramal had earlier approved Flexi LRD transactions with Reliable Group in Mumbai and Mantri Group in Bengaluru.

Khushru Jijina, managing director, said: “We are delighted with the industry response to our recently launched product flexi LRD that aims to lend substantial quantums of money on flexible terms against a marquee asset of a Tier-I developer. In November 2016, we announced our target for LRD to be Rs 10,000 crore for the next 12-15 months and have achieved 20 per cent of it within three months of its launch.” 

Through these transactions, it has further strengthened it's relationship with Wadhwa Group, an existing ‘Piramal Preferred Partner’, with which it has done multiple investments in the past. And, initiated a relationship with ASF Group. “We remain positively inclined towards commercial as an asset class and look forward to actively scaling up our position within this space,” he said. The Wadhwa Group's development is a Grade-A commercial office building located at the prime commercial hub of BKC in Mumbai. 

The building is leased to prominent retail/food & beverage outlets. Pirmal has committed Rs 440 crore under a seven-year facility, with proceeds being used for a takeover of loans from existing lenders and to reduce the overall cost of funds for existing projects of Wadhwa Group. The deal is secured against an exclusive mortgage of the project, of which 98 per cent is leased, with charge on present and future receivables. 

The ASF Insignia SEZ is a Grade-A office space on the Gurgaon-Faridabad road. The 920,000 sq ft building is fully leased to multinational corporation tenants (including TCS, IBM and Ericsson) and PFM has committed Rs 580 crore, of which Rs 435 crore has been disbursed.