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India: Altico Capital will invest $370m in real-estate in 2016, says CEO Sanjay Grewal

January 24, 2016

Altico Capital India Pvt. Ltd, the non-banking financial company (NBFC) of Asia-focused investor Clearwater Capital Partners LLC, plans to invest about $370 million this year in India’s real-estate projects. 

The company has already invested in 11 deals in the current financial year, during which growth in the real-estate sector was sluggish compared with the rate in the last five years. However, demand for affordable housing, that is apartments in the range of Rs 25-40 lakh, is growing across India.

“I believe the funding requirement on an annual basis for housing between equity, refinancing and construction funding would be about $15bn. The simple point is that the opportunity landscape for funding is immense as we have not kept pace in delivering quality housing to meet the needs of the rapid urbanisation and job creation taking place in the major cities in India,” said Sanjay Grewal, Chief Executive Officer, Altico Capital in a chat with DealStreetAsia.

Grewal said that the level of investment is expected to remain the same for the next five years. To fund it, Altico will use the Rs 450 crore ($66 million) line of credit given by IFC to Clearwater India. It also plans to raise more money. “We will raise another approximately 2,000 crore ($295 million) from a mix of sources including the domestic bank and capital markets but also other alternate sources of capital such as rupee denominated bonds and loans,” Grewal said.

Altico is engaged in real estate asset-backed lending in Mumbai, Delhi, Chennai, Bangalore and Pune. Hong Kong-based Clearwater has invested more than $4 billion in Asia, and manages about $1.5 billion worth of assets in six funds.

In 2015, Altico Capital had raised more than $300 million of equity, mainly for real estate-backed lending. It has invested more than $250 million in the past two years.

Altico typically invests an average of $22 million per deal. This year, the firm also wants to do bigger investments in the range of $29 million and $44 million, and have a loan book of $1 billion by financial year 2017-18.

India’s real-estate might remain subdued the next couple of years. “We expect real estate prices to remain stable in some cities and correct a little more in some others. We don’t see much price appreciation in near future,” Grewal said.

Altico’s recent investments include $69 million of debt financing to an upcoming residential project by a joint venture of Radius Developers and Sumer Group in south Mumbai. It also co-invested $88 million with Piramal Fund Management across multiple projects of realty firm Century Real Estate Holdings in Bengaluru, in one of the largest structured debt transactions.

 

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