Piramal Capital and Housing Finance is looking to work with distressed property developers and turn around projects.
“We formed a separate team who map out developers and projects that are in distress and give win-win-win solutions for developers,” said Khushru Jijina, managing director of Piramal Capital.
Piramal plans to bring in developers from its network to do joint ventures with distressed developers, or buy the land from them. The company works with 140-odd developers in the country.
“While our developers get new business opportunity, Piramal Capital gets to give equity or give construction finance,” said Jijina.
In partnership with Ivanhoe Cambridge, the real estate arm of Canadian fund manager CDPQ, Piramal Capital would be investing over Rs 22.50 billion in equity of residential projects in the next one year, Jijina said recently.
Piramal is also looking to raise an alternative investment fund (AIF) of $500 million from domestic and global investors to invest in energy renewables assets and list it as an investment trust on the exchanges. Piramal will act as a sponsor and earn management fee.
“It is an opportune time to aggregate assets that are being sold and list them on exchanges,” said Jijina.
He said if they invest in other sectors, they will go for separate funds and list separately. Earlier this year, India Resurgent Fund, a Cayman Islands limited partnership and a joint venture between Bain Capital Credit and Piramal Enterprises, said it will launch a $1-billion fund for investing in distressed assets in the country.
International Finance Corporation (IIFC), the investing arm of the World Bank, is planning to put around $100 million in the new fund, alongside the sponsors' investment of $200 million; the rest will come through fundraising.
As of March 2018, Piramal Capital had Rs 480 billion of assets under management (AUM), of which Rs 370 billion is in real estate. The remaining Rs 110 billion is from non-real estate business.
Jijina said Piramal Capital has exited 36 per cent of the apartment buying fund at 20-22 per cent returns.