Mumbai based real estate developer, Purvankara Projects Ltd, plans to raise to the tune of $300 million from loans and private equity firms to finance its new projects and acquire land, Bloomberg quoting a senior official of the company. Ravi Ramu, finance director. Puravankara told Bloomberg that they will part finance their acquisition plans through debt and equity. They will raise $150m through loand and similar amount through private equity but did not reveal the name of the potential investors. In the recent past, there have been many real estate players seeking funds from private equity players.
Affordable Housing in India
An ET today, also says that Credit Suisse Group AG is likely to invest $125 million in the developer’s Provident Housing & Infrastructure Ltd. unit, which develops low-cost housing. VC Circle could not individually confirm the development. Red Fort Capital is also looking at the affordable housing segment and will invest $100 million dollars over the next two years in such projects in cities like Hyderabad, the National Capital Region, Mumbai and Pune.
Warburg Pincus, a private equity biggie has invested $75 million in Unique Affordable Homes, a Jaipur-based real estate company and part of Mannat Group to build affordable housing projects in North and Western India.
Mumbai based real estate major ‘Matheran Realty’ (MRPL) has also announced the sale of its social housing ”Tanaji Malusare City (TMC)” flats at Karjat. Delhi based real estate major Omaxe is also planning to invest Rs 8,000 crore in next five years in affordable housing projects. The company has floated a subsidiary National Affordable Housing and Infrastructure which will be building the affordable houses.
Real Estate Developers Raising PE Money
Real estate players are already grappling with dwindling sales, correction in land prices, tepid demand, and rising input costs, even as they face a liquidity squeeze. The developers are now looking at other sources of funds, and they find no other option than to raise money from PE players for particular projects.
Not withstanding huge debt on its books, Parsvnath Developers, a mid-sized real estate developer is considering stake sale in individual projects. The company is currently carrying debt of about 17 billion rupees and is looking at equity dilution in its its SEZ (special economic zone) and hotel projects.
Also, Unitech is planning to raise $1bn from private equity investors for individual projects and will float SPV’s for its hotel and realty projects.