Parsvnath Developers has given exits to private equity firms like Red Fort Capital and Proprium Capital through buy-back of their investments in its office building near Connaught Place for nearly Rs 500 crore.
Parsvnath has raised funds from a NBFC through lease rental discounting (LRD) to provide exits to these PE firms.
The company now owns 100 per cent stake in its subsidiary Parsvnath Estate Developers, which is developing this office building project, having 3.25 lakh sq ft of leasable area, at Gole market here. It expects a rental income of Rs 120 crore annually from this project when fully leased out.
"We have given pre-exit to the Proprium Capital which had invested through NCD into the project more than two years back. At the same time, we are giving exit to the Red Fort Capital," Parsvnath Developers Chairman Pradeep Jain told PTI.
The company has prepaid about Rs 290 crore to Proprium Capital, which had invested Rs 210 crore as NCD in the company to give them exit, he said. A sum of Rs 40 crore was paid earlier.
Parsvnath has bought back equity shares and debentures of Red Fort Capital for about Rs 200 crore. The PE firm had invested about Rs 160 crore in this project in 2010.
"We have become 100 per cent owner of this high-end office asset," Jain said.
Asked about the source of funding for buy-back of investments made by Red Fort and Proprium, he said the company has raised funds from an NBFC through long-term lease rental discounting at an attractive rate.
In the last few years, Parsvnath has given exits to Red Fort, Sun Apollo, Kotak and SL Finance in different projects at Delhi-NCR for about Rs 600 crore.
The first phase of 'Red Fort Capital Parsvnath Towers' at Gole Market comprising 2.25 lakh sq ft has been completed and is fully functional. Around 1.7 lakh sq ft has been leased out to brands like SBI, Axis Bank, Aditya Birla, Loreal, Thomson Reuters and ICICI Prudential.
The construction of second phase, having one lakh sq ft of leasable area, is expected to be completed soon.
Jain said the company is strengthening its commercial real estate business as leasing market is better. It is developing a commercial building on KG Marg in the central Delhi.
Yesterday, Parsvnath Developers reported a profit of Rs 5.93 crore for the quarter ended March 2016, as against a loss of Rs 140.9 crore in the year-ago period.
However, income from operations fell to Rs 73.19 crore in the fourth quarter of last fiscal from Rs 267.31 crore in the corresponding period of the previous year.
Parsvnath has completed 57 projects, measuring 25.35 million sq ft of developed area. Currently, 44 projects are under construction covering 53.39 million sq ft.