Piramal Finance Ltd, the non-banking financial arm of Piramal Enterprises Ltd, has invested Rs 1,100 crore ($171 million) in a bunch of projects of Bangalore-based developer Embassy Group.
The funding is for commercial and residential projects in Chennai, Hyderabad and Bangalore, Piramal Finance said in a statement.
The investment includes Rs 360 crore for a residential project in Chennai. The project is spread across 25 acres with a built up area of 0.3 million sq ft. It then put in money in Phoenix-Embassy, a joint venture between Embassy and Phoenix Group of Hyderabad. The JV is developing 1.5 million sq ft of grade-A commercial space in Hyderabad with a potential to develop 4 million sq ft more.
Subsequently, Piramal Finance provided Rs 650 crore to Embassy Group as growth capital.
Jitu Virwani, chairman and managing director at Embassy Group, said the developer seeks to leverage Piramal group’s capabilities as it looks to expand.
Embassy Group has delivered roughly 30 million sq ft of commercial office space and 6 million sq ft of premium residential space. It has a pipeline of 17 million sq ft of commercial projects in Bangalore, Hyderabad and Chennai.
The funding comes at a time when capital from non-banking financial companies has become the main source of funding for developers. Real estate companies across the board have been aggressively borrowing from NBFCs to finish construction of ongoing projects and expand their business.
Piramal Fund Management, the real estate funding arm of Piramal Group, has been an aggressive player in the sector. Recently, it invested Rs 1,020 crore across projects of Wadhwa Group and ASF Group.
It also signed a platform deal with Ivanhoé Cambridge, a real estate subsidiary of Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), to provide long-term equity capital to residential property developers across five main cities in India.