Piramal Finance Ltd (PFL), a subsidiary of Piramal Enterprises Ltd, has invested Rs 1,000 crore ($156 million) in a bunch of projects of Mumbai-based privately held developer Rustomjee Group.
The capital has gone in the form of growth capital and customised financing solutions across redevelopment, large format townships and affordable housing, Piramal Finance said in a statement.
PFL recently sanctioned a loan of Rs 550 crore to Rustomjee ‘Urbania’ in Thane. Urbania is an ongoing 127-acre township with 7 million sq ft of development potential, of which 2 million sq ft is already delivered. The funding is structured as senior secured debt to meet project expenses and intended towards the delivery of a further 2 million sq ft which is presently at various stages of construction.
In addition, it has extended Rs 130 crore of debt finance towards Rustomjee’s Summit in Borivali as well as Rs 190 crore of growth capital for projects Global City in Virar and Meridien in Kandivali.
Previously, the investment platform had also concluded a Rs 110 crore transaction with the developer for its project Seasons at Bandra Kurla Complex. The loan has been repaid.
Khushru Jijina, managing director, Piramal Finance, said “I am pleased to have furthered our relationship with the Rustomjee Group, who is a preferred partner for us with multiple financing deals done in the past. With consolidation being inevitable in the industry, we also look forward to jointly evaluating opportunities for potential acquisition or takeover of attractive land parcels and partially completed projects on an ongoing basis.”
“We are fortunate to have Piramal Finance by our side and we see this relationship growing in the years to come,” said Boman Irani, chairman and managing director, Rustomjee Group.
With the introduction of RERA (Real Estate Regulation and Development Act), Piramal Finance, through its entire suite of products, is following a ‘financial partnership’ model by extending holistic solutions to developers, it said.
In real estate, the platform caters to the entire capital stack – right from early stage equity to late stage debt, construction finance, lease rental discounting as well as bulk buying apartments – and is able to act as a perpetual provider of capital for its preferred relationships.
In financial services, PEL, through its Piramal Fund Management Division, provides financing solutions to real estate companies. The division’s Corporate Finance Group (CFG) also provides senior and mezzanine growth capital to various businesses across varied sectors.
Meanwhile, the investment in Rustomjee comes at a time when a lot of capital in the sector is flowing in the form of debt.
Non-baking financial companies and private equity firms have ramped up their exposure in the sector given the opportunity for debt play.