Nirmal Group raises Rs 500 crores from Altico Capital – one of the largest Residential RE deals

September 27, 2016

In one of the largest financing in the residential real estate space in the recent past, Mumbai based developer Nirmal Group raised Rs 500cr from Altico Capital for 3 residential projects located in the suburban areas of Mumbai, Mulund. The funding proceeds shall be utilized towards providing an exit to existing lenders and construction finance for several projects. “The Mulund market, already the largest residential micro-market of Metropolitan Mumbai, is poised to be one of the most vibrant markets with good physical and social infrastructure” mentioned Sanjay Grewal, CEO of Altico Capital. In this respect, Altico intends to strategically place itself in the growth corridor by investing in a mix of advanced brownfield projects and early stage projects. The bouquet of projects includes three condominium towers in Mulund namely – Amethyus, Zircon and Turquoise, besides a residential project named One Edition in Nirmal Lifestyle and separately an early stage project closer to Thane.  

The investment aims to underwrite the affordable and mid-income segment of the market with a total saleable area of about 2 million square feet with about 1.25 million square feet in significantly advanced stages of construction and about 0.75 million square feet in early greenfield stages with significant levels of sales across projects.

Nirmal Group is a market leader in the micro-market and constitutes about 25% of the market share, being present in all segments of the market from retail to residential. The group has large foot prints in Mulund, Thane and Kalyan and has developed more than 5 mn sft and is currently executing close to 16 mn sft of which about 7 mn sft is expected to be delivered in the next 3-4 years. The group has close relationships with various public sector banks, structured finance investors and other financial institutions. Mr. Grewal mentioned that “We are pleased to be associated with Mr Dharmesh Jain, the Chairman of Nirmal Group, a self-made first generation developer with a sound track record. Transactions of this nature provide us with a good opportunity to strengthen our ties with the developer community and allow us to solve and structure for their financing requirements across multiple projects in their portfolio.” Altico Capital has completed several such platform deals in the last few months including Rs 300cr deal with Pune based developer Kumar Builders, Rs 240cr investment with Marvel Realtors for the construction of a portfolio of projects followed by a Rs. 180crs transaction with Pharande and Rs 200crs with the Legacy Group in Bengaluru.

Previously, in Mumbai, Altico completed a Rs. 450cr financing for Radius Developer for a project being constructed in Mazagaon. On the Mumbai market, Mr. Grewal commented that "The market remains stable across mid to upper-mid segments in established locations. Altico’s portfolio has an overall allocation of about 35% to Mumbai and we plan to deploy an incremental Rs. 1,000-1,500crs in this market in the next couple of months with other such leading Groups."

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