The co-investment fund of diversified Piramal Enterprises Ltd (PEL) and Canadian pension fund CDPQ has invested equity capital worth Rs 500 crore ($70 million) in Palava, a smart city being developed by Mumbai-based Lodha Group, the companies said in a statement.
The transaction marks the first investment of Piramal Ivanhoe Residential Equity Fund after its creation in February 2017 by Piramal Enterprises and CDPQ’s realty subsidiary, Ivanhoé Cambridge. The platform, towards which Ivanhoé Cambridge had allocated an initial $250 million, aims to provide long-term equity capital to blue-chip residential developers.
Palava is an integrated city near Mumbai spread across 4,500 acres of land. The first phase of the project, spread across 300 acres, has already been delivered. The second phase, which spreads across 700 acres, is in development.
Palava, located in the economic triangle of Navi Mumbai, Thane and Dombivli, is in close proximity with the rapidly expanding business hubs of Vashi, Airoli and Thane. Palava is currently home to a population of close to 100,000 people.
Piramal Enterprises and privately-held developer Lodha Group have collaborated for fundraise many times in the past. Piramal Fund Management had invested Rs 2,320 crore ($346 million) across a bunch of projects of Lodha Group, in one of the biggest debt transactions in India’s real estate market in 2016.
In the same year, Piramal Enterprises put Rs 425 crore ($63 million) in an ongoing residential project of Lodha Group in central Mumbai.
Lodha Group clocked net new sales of over Rs 8,000 crore for 2017-18 with collections of over Rs 9,000 crore. It claims to have delivered over 11,000 offices and homes in 2017-18.
The developer has deferred its initial public offering (IPO), which received the regulatory nod recently, citing unfavourable market conditions.