Piramal Capital grants ₹200 crore to Appaswamy for land acquisition1 min read . Updated: 19 Jun 2018, 05:18 AM IST
Appaswamy Group will use the Piramal Capital funds buy a land parcel in Kotturpuram, Chennai, from TVH Group to build a residential project with potential sales revenue of over ₹1,000 crore
Mumbai: Piramal Capital and Housing Finance, a subsidiary of Piramal Enterprises, on Monday said it has sanctioned ₹ 200 crore in structured equity to Chennai-based Appaswamy Group to finance its land acquisition initiatives.
The money allocated will be used to acquire 3.34 acres at Kotturpuram in Chennai. Appaswamy will be buying the land parcel from the TVH Group to build a residential project with potential sales revenue over ₹ 1,000 crore, said a joint statement by both companies.
“Within South India, Chennai is an important market... Since inception in 2014, we have sanctioned and disbursed ₹ 3,500 crore in Chennai alone,"said Khushru Jijina, managing director of Piramal Capital and Housing Finance.
“With consolidation in the industry, we continue to explore strategic opportunities with partners who are focused on seamless execution, high quality developments, and timely delivery," said Jijina.
The Piramal group company, which entered the housing finance business last year, provides both debt and equity capital to real estate firms.
It also provides construction finance, lease rental discounting, bulk buying apartments and housing finance solutions.
Earlier this year, Piramal Finance had said it would focus on affordable and mid-income housing projects across major cities with an initial investment of ₹ 3,000 crore.
Piramal Finance intends to scale it up and invest around $2 billion in such projects by 2020.
“We are delighted to partner with Piramal Capital and Housing Finance. We look forward to a long-term and mutually beneficial relationship as we continue on our path towards success," said Ravi Appasamy, managing director, Appaswamy Group.
With rising non-performing assets, banks have been reluctant to lend to real estate companies.
Now, developers are increasingly relying on non-banking financial companies (NBFCs) and private equity investors to fund their real estate projects.
Private equity inflows into India’s real estate sector has increased by 15% year-on-year to $2.6 billion in the first quarter of the year, eclipsing the inflows recorded during the corresponding periods of the previous 11 years, said a 30 April report published by global real estate consultancy Cushman and Wakefield.
The residential real state sector has gained prominence with the highest- ever inflows in 10 quarters, as investors looked to gain from government incentives in affordable housing scheme, the report said.
During the first three months of the current calendar year, private equity inflows into the residential sector had more than doubled to $1.32 billion.