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Altico Capital Diversifies Into Warehousing and Logistics Funding With INR 650crs Trade
Altico Capital has recently closed an INR 650Crs transaction in the warehousing and logistics sector with Mumbai based Renaissance group promoted by Mayur Suchak. The transaction includes an INR 50Cr co-investment from Asia-focussed private equity fund and Altico’s founding shareholder, Clearwater Capital (now Fiera Capital). Sanjay Grewal, CEO of Altico mentioned that, “The funding is towards an ongoing warehousing and industrial park named ‘Renaissance Industrial Smart City’ in Bhiwandi having a development potential of 20 mm sf across warehousing and industrial space. The park is the only one in Mumbai to have the Integrated Industrial Area licence.”
Over 3 mm sf of warehousing space in the project has already been committed to marquee tenants including a leading global e-commerce player. In line with the Altico’s strategy to diversify beyond residential and commercial real estate into other allied sectors such as hospitality, healthcare, education and core infrastructure, the transaction marks Altico’s foray into financing warehousing and logistics projects. This also coincides with the entry of several large global institutional owners and operators of industrial parks like Logos, E-Shang Redwood, Ascendas Firstspace, etc. into the warehousing sector in India
Grewal said, “The sector is poised to witness a period of high growth over the next few years driven by the introduction of a common Goods and Services Tax across India, increasing demand from e-commerce players, granting of infrastructure status to the sector by the Government, among several reasons.” Demand for warehousing space in the top 8 cities in India is expected to grow to 671 mm sf by FY 2021, an increase of almost 30% from FY 2016 numbers.
Altico also grew its gross income to INR 585crs from INR 425 crs in H1 FY2018, posting a robust YoY growth of 38%. Its PAT stood at INR 160crs. This was on the back of a 60% growth in its loan book, which stood at INR 7,265crs as at September 30, 2018. Sanjay Grewal also mentioned that “The capital grew by 13% to INR 2,732 crs and capital adequacy ratio remained over 35%. With this, Altico, backed by its 3 shareholders in Fiera Capital, Abu Dhabi Investment Council and Varde Partners who in aggregate manage a combined AUM of over $250bn, remains as one of the largest foreign owned and controlled NBFCs in terms of networth having more than double the capital required by NBFCs as per the RBI norms. The net debt to equity ratio continues to be comfortable at 1.7x with long term borrowings comprising 89% of the total debt. With prudent ALM management, Altico’s cash and cash equivalents as a percentage of the loan book stood at a healthy 19% as at 30 September 2018”. Recently, Altico had also announced the elevation of Naina Lal Kidwai as the Chairman of the Board from an Independent Director with plans to reach a INR 10,000cr balance sheet at the end of FY19 which currently stands at approximately INR 8,500crs.
Altico Capital India Limited, a non-deposit accepting, systemically important NBFC is primarily into the business of advancing loans and financing. Altico Capital has raised substantial capital from world class shareholders making it one of the largest foreign owned and controlled NBFCs by net worth in India. The shareholders include Clearwater Capital Partners (Fiera Capital Corporation), Abu Dhabi Investment Council and Varde Partners. The Company focuses on senior secured lending to mid-income residential projects and Commercial Real Estate sector across Tier-1 cities in India which include Mumbai, NCR, Chennai, Bangalore, Pune and Hyderabad. To complement the strategy on providing financing solutions to the Real Estate sector, the Company also focuses on providing structured finance solutions to the Infrastructure and other adjacent sectors.
Altico Capital is backed by strong financial sponsors in Clearwater Capital Partners (a credit and special situations platform based in the Asian region which has invested close to $5bn across 350 companies over the past 15 years), Abu Dhabi Investment Council (one of the largest sovereign wealth funds managing over a $100bn in assets) and Varde Partners (a global alternative investment firm headquartered out of Minneapolis-USA, focused on investing capital and resources across a broad array of sectors including RE, infrastructure and the financial sector. Varde has invested over $40 billion since inception and is currently managing investments world-wide).