Ajay Piramal-led Piramal Group and Canada Pension Plan (CPP), the largest Canadian pension fund and one of the top 10 retirement funds in the world, are joining hands to build what could be one of the largest real estate finance companies in India, as per a report in The Economic Times citing sources.
The new venture will be led by Piramal Group flagship and cash-rich firm Piramal Enterprises and will start operating next year, it added.
The two partners will invest $500 million in the 50:50 joint venture which will be engaged in providing debt finance besides doing structured investment deals.
When contacted by VCCircle, the Piramal Enterprises spokesperson declined any such deal was afoot. In a previous interaction, Jayesh Desai who co-heads the Structured Investments Group of Piramal Enterprises had told VCCircle that the group can build an investment book size of Rs 5,000 crore in the next five years but had added that his unit is only interested in infrastructure and is not looking at real estate as an asset class. The group has separate realty focused private equity arm Indiareit.
Piramal Enterprises (earlier Piramal Healthcare) struck a blockbuster deal three years ago and sold the domestic formulation business to Abbott in a staggered transaction worth $3.7 billion. Since then, the cash-rich group has been investing in new businesses besides deploying cash in various assets.
Early last year, it formed a Structured Investments Group, headed by Desai, to invest out of its balance sheet. It has recently strengthened its team and closed two large-sized investment deals. Desai had said the firm is chasing assets which need last-mile funding.
PHL Finance, another finance company sponsored by the group to carry out lending business, has funded firms in the property and education sectors. PHL is headed by former SBI chairman AK Purwar.
In another development in the realty funding space, early this year PE firm KKR was reportedly joining hands with Singapore’s sovereign wealth fund GIC to set up an NBFC that will lend funds to property developers in India.
(Edited by Joby Puthuparampil Johnson)