Element Capital Pvt Ltd, a real estate advisory firm based out of Delhi and promoted by Sharik Currimbhoy, has set up a non banking finance arm to lend to real estate developers and SME’s.
It has received commitments worth $54.4 million (Rs 300 crore) already and plans to deploy the capital in the next quarter. It is looking at deploying close to $200 million (Rs 1,100 crore) in a year’s time.
The NBFC has been set up by buying out an existing NBFC, which Currimbhoy declined to name.
“We plan to deploy Rs 1,100 crore in a year’s time and the capital is being raised from the domestic market,” Currimbhoy said.
The NBFC, which is being branded as Element Finance Pvt Ltd, will be based out of Mumbai. It will undertake debt syndication and will lend at 18-22 per cent. The debt lending is for a period of 36-48 months.
“We are also looking at doing last mile funding, mezzanine debt and structured equity transactions. As of now we will focus on Mumbai-based developers and we are also looking at developers in Pune and Bangalore,” Currimbhoy said.
Element Finance will look at an average transaction ticket size of Rs 20 crore to Rs 150 crore. The transactions will happen through non convertible debentures (NCD), convertible preference shares etc. It will also lend for working capital requirements.
NBFC’s have seen the highest traction from developers in recent times for raising short term capital. Other NBFC players include Piramal Enterprises, Xander Finance and Indostar.
(Edited by Prem Udayabhanu)