Bengaluru: Piramal Capital and Housing Finance Ltd recently financed three projects adding up to around ₹ 1,500 crore in the National Capital Region (NCR), the company’s managing director said.
The Mumbai-based firm, part of the Piramal group, has invested ₹ 400 crore in various projects of ATS Infrastructure Ltd in Noida, comprising a completed commercial office asset, an under-construction office project and an under-construction residential project. The capital will be used for financial closure of the under-construction projects and for construction.
In the second deal, Piramal committed ₹ 275 crore in Prateek Group’s under-construction Grand City project in Siddharth Vihar, Ghaziabad. The funding will be used towards working capital requirements and enabling financial closure.
Piramal has funded both entities previously as well.
Piramal has also committed ₹ 850 crore to M3M India Pvt. Ltd for its mixed-use project on Gurugram’s Golf Course Extension road. The project has premium residential units and a mix of retail, food and beverage and entertainment outlets. Piramal has shifted its focus from pure-play residential assets in Gurugram to mixed-use or commercial office projects in the last two years.
Piramal Capital’s current portfolio in NCR extends across the capital stack and across various real estate asset classes. It has focused on volume-driven residential projects in Noida and Greater Noida, two markets that have performed reasonably better than Gurugram.
Piramal Capital MD Khushru Jijina said the transactions show investment decisions are based on backing the developer partner first, before the project and the place.
“Nowhere is this more true than in the NCR where we have supported developer partners that have a razor sharp focus on delivering a quality product within committed timelines. Our flexible transaction structures and strong underwriting skills enable us to further identify and customize ‘off market’ opportunities. We firmly believe that despite market headwinds, the NCR will continue to see pockets of strong demand," Jijina said.
Piramal’s unique strength is known to be its ability to customize transaction structures to ensure there is adequate security in place.
Getamber Anand, chairman and managing director of ATS Infrastructure said while project launches in Noida have done very well, Gurugram is also picking up gradually.
Prateek Group’s project has continued to witness strong sales momentum in light of a low ticket size, prime location, steady construction progress and developer track record, Jijina said.
M3M India’s director Pankaj Bansal said the mixed-use project has sold very well since it was launched last September.
“Piramal has given debt and has come in as a partner, which will share the upside of the project," he said. A Prateek group spokesperson didn’t respond to calls.
Many private equity investors and non-banking financial companies (NBFC) have remained cautious about the NCR market and, like Piramal, have worked selectively with certain developers. A rise in project launches is expected to boost the investment momentum.
“NCR market continues to slow but some developers are able to get traction in sales. Customers are taking a lot of time to take decisions and many developers are still relying on NBFCs for construction and replace existing loans," said Santhosh Kumar, vice-chairman, Anarock Property Consultants.
Kumar said Piramal has actively invested in NCR and provided a lot of support to developers, which has helped in stepping up the pace of construction in those projects