Real estate veteran Anuj Puri, who had recently set up a brokerage and fund management business, ANAROCK Property Consultants, is looking for a tie-up with global investors to set up a non-banking financial company, a top company executive told VCCircle.
The NBFC will predominantly tap into opportunities in the residential real estate market and can opportunistically look at commercial assets. “We have a long-term plan to provide capital through the development cycle of projects. Our aim is to be one of the top financing firms in the loan book of a developer. To that end, we would bring in the expertise and capital in the right combination,” said Anuj Puri, chairman, ANAROCK Property Consultants.
The company is in talks with multiple global investors and is working on sealing a deal soon.
Sandip Kundu, chief executive officer, ANAROCK Investment Advisors, said that the NBFC will complement the fund management business. “We will either set up a platform from scratch or take over an existing company to venture into the space. Both lines of thoughts are being explored currently and a call will be taken depending on what suits our strategy the most.”
According to Kundu, real estate financing is dominated by refinancing by both private equity firms and NBFCs, but ANAROCK will chart out a different strategy and work as a long-term capital provider, breaking the ongoing cycle of financing and refinancing in the ecosystem.
“We are looking at doing senior lending from the NBFC platform. We will not only provide capital, but also the right guidance to see through the completion of projects. So, our funds and NBFC will tap into two related, yet different kinds of strategies,” he added.
Kundu refused to share details on the capitalisation and loan book, but went on to add that the aim of the platform will be to become one of the biggest names in real estate financing.
Anarock currently has residential brokerage and fund management businesses, both of which were bought from Anuj Puri’s former employer JLL India.
As first reported by VCCircle, Anuj Puri had recently bought the fund management business of JLL India, Segregated Funds Group. With the acquisition, it got control over the Rs 160-crore Residential Opportunities Fund I, and Residential Opportunities Fund II having a Rs 300-crore corpus. Puri had also acquired the residential brokerage business of JLL India to service the gap that exists between buying and selling of properties in India.
Several global financial firms have taken the NBFC route to take exposure in the Indian real estate market. Global investment giant KKR had tied up with Singapore’s sovereign wealth fund GIC to set up an NBFC to focus on investments in the Indian real estate space.
Debt capital has also played an important role in fulfilling the funding needs of developers. Given the slow sales momentum in the housing segment, developers have gone for multiple rounds of debt funding from private equity firms and NBFCs to stay afloat in the market. The opportunity has prompted a host of financial services firms to either set up real estate-focused NBFC or ramp up exposure through their debt platforms.
Piramal Fund Management has been sealing deals through its NBFC and has also added new segments of the realty space in its investment horizon. Financial services group ASK Group, which has presence in real estate funding through private equity funds, had also set up a sector-focused NBFC. The platform has set up a team and has positioned itself as a capital provider to fill the gap between bank funding and structured debt.
Debt capital out did equity funding in terms of the number of transactions in the real estate market in the first half of current calendar year, according to VCCEdge, the research platform of News Corp VCCircle.