Piramal lends ₹450 crore to Embassy-Phoenix JV

BENGALURU: Piramal Finance Pvt. Ltd, which houses the entire financial services business of the Piramal Group, has lent ₹450 crore to a joint venture between Bengaluru-based developer Embassy Group and Hyderabad’s Phoenix Group, which is developing three special economic zones (SEZs) in Hyderabad, company executives said.

The money has been given in the form of construction finance to procure approvals and develop the SEZs, which will be built across 10 million sq. ft.

In the joint venture, Phoenix Embassy Tech Zone Pvt. Ltd, Embassy is an equity partner while Phoenix provides the land. Both are involved in project construction.

With this deal, Piramal Finance has committed more than ₹2,000 crore in the last two years or so in Hyderabad, of which ₹1,000 crore has been committed to the Phoenix Group.

“Hyderabad has advantages of having one of the best infrastructure among cities and a proactive government,” said Khushru Jijina, managing director at Piramal Finance.

“We started investing in Hyderabad in 2014, at a time when most other banks or NBFCs (non-banking financial companies) perceived Hyderabad negatively for investments, considering its history of political uncertainty and weak real estate sector for a prolonged period,” said Jijina.

“Given faster approval process, infrastructure and growth potential, especially in the commercial office space, we are positive and intend to commit an additional ₹2,000-3,000 crore in Hyderabad in the coming year,” he added.

Embassy chairman Jitu Virwani confirmed the transaction.

Jijina said the Phoenix Group is a preferred partner in the city and a market leader in the commercial real estate space, having delivered more than 6 million sq. ft of office space.

The Phoenix Group has a large portfolio of commercial office projects, with nearly 23 million sq. ft of space under construction.

The firm has attracted substantial private equity and NBFC capital this year, having raised ₹309 crore from Altico Capital India, the NBFC arm of Asia-focused investor Clearwater Capital Partners, as well as ₹90 crore from Motilal Oswal Real Estate.

“We have got ₹450 crore from Piramal for the three SEZs and depending on how the projects perform, additional funds may be infused into the projects,” said Gopikrishna Patibanda, managing director of Phoenix Group.