Leading NBFC (non-banking financial company) Piramal Finance Limited (PFL) which is a subsidiary of Piramal Enterprises Limited, has already established its team for investing in mid-range and affordable housing residential projects throughout top metro cities in the country. The company has already lined up close to Rs. 3, 000 crore as an initial investment for such transactions in major realty markets in India. Piramal Finance will be operating on the basis of a partnership led approach towards investing in affordable housing projects in the country.
The NBFC offers preferred and pure equity capital for leading real estate developers who seek to develop or purchase land and require capital at an early stage of their ventures. Piramal Finance is also open to independent land acquisition and may invite top real estate developers for joint-development transactions. Piramal Finance is not just after offering debt/equity capital for the mid-range and affordable housing categories and seeks to be a full solution inclusive of early stage equity and debt linked to construction. This will help real estate developers accomplish total financial closure for the project from the outset.
Piramal Finance has been spurring sales volumes from the B2B research & sales division called Brickex and these sales get funding from home loan products which are personalized and cater to self-employed and salaried home loan customers. Through the wholesale loan book, the company is also enabling construction finance (linked to milestones) for real estate developers which comes in very handy indeed. As of September, 2017, Piramal Finance’s loan book touched Rs. 200 crore, primarily coming from corporate lending ties with top realty players. The loan book target by the year 2020 is Rs. 15, 000 crore.
Affordable and mid-income housing is now a major segment for most investors. This segment is finding more players after the emphasis on the same by the Central Government. HDFC Capital recently inked its deal with Prestige Estates for a new $390 million platform dedicated towards low-cost Indian housing. IFC (International Finance Corporation), the World Bank’s investment division for the private sector, is also active in this space. It has already confirmed capital for projects by Ashiana Housing, one of the leading North Indian real estate developers. Piramal Finance Limited ventured into the retail housing finance category in September, 2017 via Piramal Housing Finance Private Limited, its subsidiary. Along with home loans, loans against property and construction finance are provided to small real estate developers. The total AUM (assets under management) for Piramal Finance was Rs. 50, 000 crore as of September last year.
