Group companies of Kotak Mahindra and Lonestar-backed RattanIndia Finance, have invested Rs 5 billion in an affordable housing project of the Bengaluru-based Adarsh Group, sources said. “This is of the biggest debt deals in real estate after the NBFC (non-bank finance companies) liquidity issue. Many NBFCs have stopped lending to real estate, to meet their commitments,” sources said.
RattanIndia and the Kotak subsidiaries have lent the money for a three million sq ft project, Adarsh Heaven. It would be the first affordable housing project of Adarsh. Located at Yelahanka in North Bengaluru, it will be developed in phases. This is the first investment by RattanIndia after it set up a real estate division and hired Anchit Lakhotiya from Standard Chartered. RattanIndia started operations early this year with a Rs 26-billion investment from its group entity and Lone Star Funds.
“Kotak Mahindra Group, through Kotak Mahindra Prime and Kotak Mahindra Investments, has given sanction for Rs 3.2 billion and we have syndicated Rs 1.8 billion with RattanIndia,” said Paritosh Kashyap, managing director at Kotak Mahindra Investments. “Affordable housing still has many takers in the market. Investors are looking to invest in projects where cash flows are visible,” said the sources. NBFCs had become major lenders to real estate in the past couple of years. With housing finance companies, these accounted for 61 per cent of overall commercial real estate borrowing as on end-March, said a recent report from CLSA. Real estate loans given by top NBFCs had grown 24-70 per cent annually between 2015-16 and 2017-18, it said.
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