Puravankara raises PE funding from ASK Group for Chennai project

Public listed real estate developer Puravankara Ltd has entered into its first private equity partnership raising around 82 crore (13 million) from ASK Group for its arm Provident Housing Ltd. Financial services group ASK invests in real estate through ASK Property Investment Advisors.

The investment has gone in a Chennai project which will be developed on an area of 31.69 acres in Poonamallee. The developer has acquired the land for Rs 110 crore and the project is expected to be launched by the end of this financial year.

The average price of the units would be in the range of Rs 4,500 sq ft and it is expected to generate revenue of Rs 1,500 crore. The project will offer a mix of 1, 2 & 3 BHK apartments.

Provident is positioned as a 'premium affordable' housing platform which in effect caters to the mid-income housing segment.

A Purvankara spokesperson said that ASK Group has invested 75 per cent of the land acquisition cost and the deal has been sealed in the form of equity. Over the years, developers have seen funding crunch, especially at land approval stage on account of a drop in equity funding. However, with a positive sentiment around India, equity deals are set to make a comeback as fund managers are looking to take the higher risk that comes strapped with such deals.

ASK Group is one of a few players which have continued doing equity deals even in tough times. Currently, it is raising and deploying capital from its maiden offshore and third domestic realty fund. Its maiden offshore fund has a target corpus of $200 million and the domestic fund has a corpus of Rs 1,500 crore. Recently, it clocked exits from two investments in Pune where it sealed exits worth Rs 147 crore.

Puravankara, which has presence in Bangalore, Kochi, Chennai, Coimbatore, Hyderabad, Mysore, Mumbai and Pune, has 24.87 million sq ft of projects under development with 81.83 million sq ft expected to be developed over the next few years. It had established Provident in 2008 and has launched 13.93 million sq ft across Chennai, Bangalore, Mangalore and Coimbatore under this unit. Of this, 4.55 million sq ft has been completed and delivered. It has a pipeline of 9.51 million sq ft across Bangalore and Hyderabad.

(Edited by Joby Puthuparampil Johnson)

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