Bangalore: Mumbai-based developer Wadhwa Group is close to raising 750 crore for The Address, its luxury homes project in suburban Ghatkopar where apartments cost 1.7-10 crore, three people familiar with the transaction said.

KKR India Asset Finance Pvt. Ltd, the local arm of global investor Kohlberg Kravis Roberts and Co. LP (KKR), will invest 350 crore, while Standard Chartered Bank will lend 400 crore.

Some of the money would be used to repay a loan from Indiabulls Financial Services Ltd and the rest to develop the project, one of the three people said. Indiabulls had earlier lent around 330 crore for this project, out of which around 290 crore is yet to be repaid.

This will be probably the first investment by KKR India Asset Finance, a real estate-focused non-banking finance company (NBFC). It makes debt transactions as well as combined debt-equity deals with property developers in India.

Builders are increasingly turning towards alternative sources of funding as bank finance dries up.

Standard Chartered Bank and KKR declined comment to email queries.

Last year, KKR had hired Ashish Khandelia as director for its real estate investment platform from Morgan Stanley Real Estate. It made its second key hire this year, hiring Saurabh Gupta who was previously with SUN-AREA Property Partners. Khandelia’s team looks for opportunities for long-term real estate investments in both early and advanced stage projects. It works in close coordination with the overall KKR ecosystem in India.

“Wadhwa is currently focusing on sale, retiring debt and replacing high-cost debt with low-cost capital," said a company executive, who did not want to be named.

The realty firm headed by Vijay Wadhwa has sold nearly 1.6 million sq. ft out of the 2.5 million sq. ft project.

While many NBFCs offer funds to the real estate sector in India, most of them do not lend more than a third of their portfolio to the sector. Apart from its real estate NBFC, KKR has had a successful run with its existing Indian NBFC KKR India Financial Services Pvt. Ltd, which was set up in 2009.

Builders’ cash requirements suit both private equity funds and NBFCs looking for investment opportunities as the real estate sector looks to resurrect itself after more than two years of weak home and office sales.

Earlier this year, India Infoline Finance Ltd and some of its wealthy clients together invested 150 crore in a 500-acre Navi Mumbai township project of Wadhwa. Before that, the developer had raised 110 crore of debt from JM Financial Products Ltd, another NBFC, to fund a luxury project in central Mumbai.

“Developers are raising capital mostly from NBFCs when they need to repay existing loans, because cash flows from projects are weak and therefore, internal accruals are not enough to repay debt," said Rajeev Bairathi, executive director, capital transaction group and north India, Knight Frank India.

Bairathi says there are also some builders who are scouting for growth capital required to make fresh land acquisitions or to kick off a pipeline of projects.