Housing firm Mahaveer gets ₹380 crore from Piramal Finance
BENGALURU: Affordable housing company Mahaveer Group has raised Rs380 crore from Piramal Finance Ltd for five of its projects in Bengaluru, three people familiar with the transaction said.
The builder plans to mainly use the money as working capital and partly for refinancing purposes. Piramal has extended the money as construction finance. A small part of it will be used to give an exit to Motilal Oswal Real Estate Fund, which had invested around Rs22 crore at an early stage of a project.
This is the second large deal in budget housing after Mahindra Lifespace Developers Ltd—the real estate arm of Mahindra Group—partnered with HDFC Capital Advisors Ltd in October to jointly invest Rs500 crore over the next three years to develop affordable housing projects.
While that transaction aimed to invest in affordable housing projects by providing patient capital in the form of long-term equity, the Piramal-Mahaveer deal mainly taps the construction financing route.
“The five projects are in various stages of development, including early stage and advanced stage of construction. Most of these projects are being sold in the mid-income price category, at a base price of Rs3,300-4,400 per square foot,” said Praveen Kumbala, managing director of Mahaveer Group.
In early 2016, private equity firm Peninsula Brookfield Investment Managers Pvt. Ltd had invested Rs100 crore in midincome housing firm Mahaveer Group’s projects in Bengaluru. Kumbala said the repayment process is on. Sharad Mittal, director and head of real estate funds at Motilal Oswal Real Estate, confirmed the Mahaveer exit and said the investment generated good returns.
A Piramal spokesperson declined to comment on the deal. Piramal, one of the largest lenders and investors in real estate, has grown its financial services business from Rs35,000 crore in December 2016 to Rs50,000 crore now, including both sanctioned loans and deployed money.