Mumbai-based developer Sheth Developers Pvt. Ltd has raised Rs 180 crore (around $27 million) in long-term debt funding from non-banking financial company (NBFC) Altico Capital, the investor said in a statement.
The money will be mainly used for the construction of a residential project – Zuri – which has a potential of 0.6 million sq ft in Thane. The project is part of a larger layout by the developer. At the location, it has so far delivered 1.5 million sq ft of residential projects and also owns Viviana Mall jointly with Singapore’s sovereign wealth fund GIC.
Mango Advisors LLP was the financial advisor to the transaction.
Altico Capital has been actively investing across real estate projects for the last one-and-a-half years. It has backed projects of developers such as Panchsheel Group, Pharande Group, SARE Homes, Kumar Urban Ltd and Nirmal Group through latest transactions.
Sponsored by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners, Altico Capital has been lending to the real estate segment and plans to deploy Rs 4,000-5,000 crore on an annual basis in the residential and commercial real estate sectors across Tier I cities in India.
Sheth Developers, which has a portfolio of over 15 million sq ft under construction, has roped in a host of private equity funds and NBFCs for its projects over the years. Recently, it gave an exit to BlackSoil Realty Fund – a private equity fund that had invested in the projects of the company in 2014 – giving 1.55 times returns to the firm.
The real estate investment ecosystem is dominated by debt funding with NBFCs ramping up their play and PE funds shelling out money through the debt route. The sector attracted a total of $2.4 billion in 2016 across 122 transactions, down 54% in value terms and 40% in volume terms from 2015. Of the total capital flow, $1.9 billion came in the form of debt transactions.
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