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The realty firm plans to build 20,000 affordable homes under Happinest, over the next five years. Going by the current market rates, this entails an investment of around Rs 1,500 crore.
According to Sriram S Mahadevan, business head, Happinest, the parent company will fund part of the investment. Besides, several VCs and PEs have also shown interest in the project, Mahadevan told Business Standard. The project is targeted at the emerging Indian middle class, he said.
"We have not decided how much we have to raise. Many investors have approached us but we haven't responded to them yet," Mahadevan added.
Besides expanding in Maharashtra, the company is looking at Andhra Pradesh, Rajasthan and Madhya Pradesh. "We will look at a similar scale (developing the project in 15-20 acres of land). It depends upon the state policies (for affordable housing projects) we will look into these states" said Mahadevan. The company's flats are priced between Rs 11 lakh and Rs 21 lakh, with sizes ranging from 351 sq feet (1 BHK) to 762 sq feet (2 BHK).
Investment and fund-raising activities in the affordable and mid-market housing segments have increased in recent months, following the government's Housing for All plan by 2022. This scheme offers an interest subvention of 6.5 per cent on housing loans to the economically weaker section (EWS), including slum dwellers and low-income groups (LIG).
The International Finance Corporation (IFC) recently invested $25 million to finance affordable projects by Tata Housing. Similarly, Asia-focused investment firm Equis Funds Group invested Rs 720 crore ($116 million) in the Bengaluru-based real estate developer Assetz Property Group. Among other investments is one by PE fund Carlyle Group, HDFC, IFC and others in Value and Budget Housing Corporation.
India needs close to seven million houses every year. Almost 75 per cent of this demand is from the affordable housing segments. The country needs about 300,000 acres of land to cater to the affordable housing segment demand, according to reports.
