Piramal Fund Management, the real estate investment arm of Piramal Group, has invested Rs 425 crore (about $63 million) in an ongoing residential project of Lodha Group, the Mumbai-based developer said in a statement.
The money will be used for construction of premium residences in a project located in central Mumbai. The project has more than 5 lakh sq ft of saleable area and is 40% sold, the statement said.
The deal has been structured as a fixed-return debt investment with periodic coupon payments and has an appropriate security mechanism in place, including a hard asset cover as well as an escrow of receivables, the statement said.
Khushru Jijina, managing director at Piramal Fund Management, said this is the firm's first structured deal with Lodha Group and that it is evaluating the developer's project portfolio for possible investments in the future. Abhishek Lodha, managing director at Lodha Group, said the developer seeks to grow its pool of credible funding partners.
Piramal Fund provides capital across the spectrum, starting from early-stage equity to late-stage debt and construction finance. Positioned as a perpetual provider of capital for real estate projects, it recently created a 'Piramal Preferred Partner' platform under which development partners can draw from a pre-sanctioned credit limit.
The investment firm has added plotted developments and commercial projects to its investment horizon. It has been aggressively sealing deals in real estate, with some of its recent transactions being with Bangalore-based Habitat Ventures and Noida-based The 3C Company and ATS Greens.
Lodha Group has climbed to the top position in the real estate sector in terms of sales with Mumbai and London as its key markets. It clocked sales of over Rs 8,000 crore in financial year 2015-16 and is aiming for Rs 10,000 crore for the current financial year. It also plans to raise funds via an initial public offering in the long term.
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