Piramal Fund Management forays in Ahmedabad with Rs 225-crore investment

Ajay Piramal-led Piramal Fund Management has invested total Rs 225 crore in a realty project of developer Ganesh HousingBSE 6.92 % Corporation. The real estate investment platform of Piramal Enterprises has invested in the project spread over 10 acres in Ahmedabad through debt. 

The transaction marks Piramal Fund Management's foray into Ahmedabad and any tier II city. The fund has so far been focusing on top five property markets including Mumbai, Pune, Bangalore, National Capital Region and Chennai. 

Apart from our investment focus in on top five cities, we will also be looking at tier II cities with prominent markets like Ahmedabad, Kolkata, Nagpur, Nashik, Coimbatore and Jaipur," Khushru Jijina, MD, Piramal Fund Management told ET. "Our decision to expand our target geographies was based on a great deal of research in potential target locations and we found Ahmedabad to be a viable destination for investment and look forward to expanding our presence over time." 

The fund has invested around Rs 200 crore in the project to support Ganesh Housing's acquisition of the land parcel situated close to Surdhara Circle in Thaltej, Ahmedabad, while Rs 25 crore have been sanctioned as working capital for the project. 

The project is estimated to have total development potential of 1.8 million sq ft of saleable area. It will be developed as a mixed use project with a combination of 12 residential towers coupled with both commercial as well as a high street retail component. 

The deal has been structured as a fixed return investment of over 18% with appropriate security and control mechanisms in place. The project is expected to be completed in the next five years, which is also the tenure of the debt. 

Piramal Fund Management's structured investments division invests in various sectors including infrastructure and total funds under management under these businesses are around $2 billion. Piramal Fund also has strategic alliances with pension funds like CPPIB Credit Investment and APG Asset Management. 

Source: EconomicTimes

Piramal Enterprises to invest $2 billion in real estate projects in next 2 years

Ajay Piramal, Chairman of Piramal Enterprises

Piramal Enterprises plans to invest $2 billion in real estate projects over the next two years, betting that a revival in the economy under a new government will boost demand for property, its Chairman Ajay Piramal said on Wednesday.
Its planned investment could help developers complete commercial and residential projects left unfinished when they ran out of money and banks cut back on credit to a sector badly mauled by a slowdown in Asia's third-biggest economy.
"We are more optimistic about the sector this year compared to last year because of a stable government and the overlying expectations for the economy to perform better," Ajay Piramal told Reuters.
Home sales have come to a halt as high inflation and interest rates deter buyers, pushing up the stock of unsold inventory.
In the region around the capital, New Delhi, the inventory pile-up could take 53 months to clear at the current pace of sales. In India's leading metropolitan areas, including financial capital Mumbai, it would take 35 months, according to Mumbai-based firm Liases Foras.
Many property firms are scouting around for new sources of funding, with banks unwilling to lend more to the debt-laden sector and the weak financial situation of many developers making equity offerings unattractive.
Indian and foreign investors have become cautious on real estate after two years of less than 5 per cent economic growth. Private equity investment in the sector dropped to $1.6 billion last year from $1.95 billion in 2012, according to research firm Venture Intelligence.
A Reuters poll of economists last month forecast the economy would grow 5.5 per cent in the current fiscal year to March and 6.4 per cent the following year as Prime Minister Narendra Modi pushes through reforms to attract investment.
"The banks are not still increasing their allocations to real estate. Since banks are not increasing and demand for money is there, the NBFCs (non-banking financial companies) and PEs (private equity firms) are busy of course, more transactions are happening," said Amar Merani, CEO of Xander Finance Private, part of The Xander Group, an emerging markets investment firm.
Piramal, known for identifying new investment opportunities and whose moves are closely watched by bankers and investors, said his company was looking to put money into both residential and commercial projects.
It makes real estate investment through debt, equity and structured finance routes.
In February, it tied up with the Canada Pension Plan Investment Board, which manages Canada's national pension fund, on a $500 million fund to finance residential projects in India.
Piramal, whose other business interests include healthcare and speciality glass packaging, stepped up its financial service activities after selling its Indian drugs business to US-based Abbott Laboratories for $3.72 billion in 2010.

Source: BusinessToday