Recently Warburg Pincus, one of the leading international Private Equity (PE) Investor, has made a whopping investment of USD 284 (INR 18,600) million in Piramal Realty. The investment would give a major boost to the real estate company, which intends to utilize the investment across four different individual projects.
Besides, it also signals a new paradigm shift in the Indian realty landscape & indicates how the Indian realty market is maturing and evolving gradually.
Exciting Sentiments: The sentiments are positive among the global PE investors towards the Indian real estate market. Hitherto, it was Indian e-commerce that was one of the promising sectors, which PE investors were looking into. However, increasingly there is a surge in terms of interest towards the Indian realty market.
Paradigm Shift: The significance of interest in the Indian realty market among the PE investors is indicative paradigm shift in the sector. It also demonstrates how PE could be an alternative source of financing for development and infrastructure projects. Especially in a time when the cost of credit is becoming higher and difficult for developers due to subdued performance in the recent past.
Entity Level Investment: Previously PE investor companies such as Blackstone & GIC have made investments in the Individual projects in India. The latest investment is an entry level investment, different from previous investments- Reflecting the rise in faith among PE investors towards Indian realty developers.
International Standards: The recent PE investment from globally recognized entities such as Warburg can be a game changer to the Indian realty industry and help them leapfrog to international standards due to the global expertise of the investors. It should be noted that earlier Warburg has invested USD 292 (INR 19,200) million in Bharti Airtel in late 90s and have raised USD 1.6 (INR 106) billion in 2005.
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