Piramal Fund Management expands offering to include construction finance; Approves transactions worth INR1100cr in the first instance

Piramal Fund Management expands offering to include construction finance; Approves transactions worth INR1100cr in the first instance

Piramal Fund Management had announced its intention to enter the construction finance space in Q3 FY15. Today, it announces that has approved 9 construction finance proposals totaling INR1100cr.

The initial transaction volume is spread across Mumbai, Delhi NCR, Bangalore, Pune and Chennai, with projects located in micro markets with robust demand fundamentals. The funds  have been earmarked across a combination of late stage, mid-market residential developments in both city centric as well as suburban locations. In one instance, funds are also intended for construction of a brown-field commercial office development. These facilities range from 3-5 years each, with a sufficient principal moratorium period to allow the project cash-flows to stabilize.

Piramal Fund Management is uniquely capable of catering to the entire capital stack – right from early stage equity to late stage debt and now construction finance and is therefore able to act as a perpetual provider of capital within this space. Typically, structured equity or structured debt investments would often get refinanced by banks or other NBFCs once the projects would achieve certain milestones – with construction finance, the platform is able to extend the overall tenure of their relationship with a project by not requiring the development partner to refinance once the project matures.

Khushru Jijina, Managing Director, Piramal Fund Management said, “With construction finance, we have consciously completed the last remaining element in our our suite of product offerings. This makes sense for our platform as well as for our development partners as we are now able to further our engagement with them and fund the entire project life. We are looking  at many more such investments where the developers are experienced, projects are profitable and de-risked, and our investment is ring fenced.”

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