Piramal Group and IIFL Wealth Management have partnered to co-invest in a ₹2,000 crore alternative investment fund (AIF) that would specifically help projects that need last-mile funding. Last-mile funding is normally used for unlocking projects that have come to a halt due to liquidity issues.
It is increasingly becoming popular as an option for developers that have exhausted other funding options towards the closing phase of a project that is already underway.
“The market today presents many opportunities for last-mile finance in projects that require a minimum amount of funding for their completion,” Piramal Group said in a release, adding that the new AIF will provide capital to established developers in Tier I cities across India.
“The creation of this AIF is in line with Piramal Group’s strategy to build newer platforms for co-lending with liked-minded reputed institutions. We will initially seed the fund with existing loans from Piramal Group’s portfolio, while continuing to explore quality deals from the market in future,” said Khushru Jijina, Managing Director, Piramal Capital and Housing Finance.
With the launch of the AIF, Piramal Group will also be facilitating external capital alongside its lending business. This will enable Piramal to further grow its lending business through a new co-investment or co-origination model, the company said.
{{/usCountry}}With the launch of the AIF, Piramal Group will also be facilitating external capital alongside its lending business. This will enable Piramal to further grow its lending business through a new co-investment or co-origination model, the company said.
{{/usCountry}}Karan Bhagat, founder, MD and CEO, IIFL Wealth Management, said in the release: “Piramal’s deep domain expertise in real estate and IIFL Wealth’s ability to seize the best market opportunities have resulted in well-structured investment idea which will provide clients an ideal risk-adjusted return.”
The central government had also approved a similar ₹25,000 crore AIF last month to boost stalled middle and low-income RERA-registered housing projects that were net worth positive.
SBICAP Ventures Ltd, the investment manager of that fund, had recently announced that the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund I raised ₹10,530 crore in its first round and attracted interest from investors like State Bank of India, Life Insurance Corporation of India, Housing Development Finance Corp. Ltd and major public sector banks.