Bangalore-based real estate developer Unishire has raised Rs 126 crore ($19 million) from Reliance AIF Asset Management Co. Ltd, a part of Reliance Capital Asset Management (RCAM), through non-convertible debentures (NCDs), the company said on Tuesday.
The proceeds would be used for replacing high-cost debt, construction of ongoing projects and expansion. The corpus will be released in two tranches of Rs 90 crore and Rs 36 crore and will have a maturity period of 45 months.
“All our projects are delivering value and strong return on investment as on date and we are optimistic that this new partnership will also witness upward trajectory to its investment,” said Pratik K Mehta, managing director, Unishire.
The developer claims to have 5.6 million sq ft under construction and another 6.4 million sq ft planned for development in three years. Currently, it has only one project delivered in its portfolio; eight are going on and the remaining ones are at the planning stage.
Jones Lang LaSalle Property Consultants (India) Pvt Ltd advised the developer on the transaction.
Reliance AIF is currently deploying capital from its maiden fund worth Rs 720 crore under AIF route and is gearing up for launching a second fund with a target corpus of Rs 1,000 crore. From the maiden corpus, it has so far sealed nine transactions (including an upcoming one) through non-convertible debentures (NCDs) with a negotiated internal rate of return (IRR) of 20-24 per cent.
It aims to finish deploying the money from the fund by December.
Its upcoming fund will replicate the strategy of first fund and deploy capital in residential projects through NCDs. “We will specifically look at projects that have relatively shorter gestation periods, typically between 3 to 4.5 years and has no land aggregation or acquisition risk,” a company spokesperson told VCCircle recently.
Bangalore realty market has been one of the top destinations for private equity money in India. In the first half of 2015, the Silicon Valley of India attracted maximum capital (in terms of value) among its southern peers while it stood at second spot after Mumbai at national level.
The first half of the year saw total capital flow to the tune of $1.27 billion against $892.81 million in the country in the same period last year, according to VCCEdge, the data research platform of VCCircle.
