Altico Capital to fund commercial realty, infrastructure projects

March 21, 2016

Altico Capital to fund commercial realty, infrastructure projects It lends money to residential segment currently. Altico Capital India Pvt Ltd, the non-banking financial arm of Clearwater Capital Partners, has charted out a two-pronged strategy to scale up besides maintaining a tight grip on its mainstay of residential realty. In an interaction with VCCircle, Sanjay Grewal, chief executive officer, Altico Capital, said the firm is looking at new avenues and is adding commercial real estate and infrastructure projects to its investment mandate.

"Our aim is to scale within real estate and related sectors. On the commercial front, we have started evaluating deals and will be sealing some transactions in the coming financial year while on the infrastructure front, the planning is still at a very nascent stage," he said.

Office space leasing has picked up over the last one year. This in effect has led to developers firming up their plans to launch commercial projects and investors opening up their purse strings for investment. Recently, one of the biggest lenders in real estate Piramal Fund Management added commercial realty to its investment avenue.

"Given the ecommerce boom and marco-economic factors, supply of Grade A office space has not been able to keep pace, creating a dearth of quality developments. This is where we see an opportunity. We would aim to deploy roughly $150 million in 12-18 months in office development,” Grewal said. The firm would ideally like to come in at early stage of project development and keep its geographical presence within the top realty markets. On the infrastructure front, the firm sees a window of opportunity given the way the sector has panned out with huge dependence on banks and larger NBFCs. It will target all the sub segments including telecom, road and highway projects and can come in at any stage suitable for transactions. “There is an opportunity for us to be present where banks can’t and to turn regulatory arbitrage in our favour. This is another aspect through which we can scale and we will be firming up our plan towards the second half of next fiscal," he said.

Residential realty - Even while it is framing contours of future plans, it is going strong on deploying capital in residential realty. It aims to close the current financial year having deployed Rs 2,000 crore across 13-14 deals in its major markets. Its book size currently stands in the range of $200 million.

"We have an ambitious aim of deploying $400 million every year over the next couple of years to take our loan book to $1 billion by 2018 and $1.5 billion by 2020," he said.

The firm typically backs mid-income housing projects in Tier I markets of both Tier I&II developers but is now aiming to add more cities from south India including Hyderabad to enhance its geographical presence. The recent deals of the firm include an undisclosed investment in Pune-based Guardian Developer; Rs 720 crore in a clutch of projects of Century Real Estate along with Piramal Fund Management and Rs 450 crore in a South Mumbai joint venture project of Radius Developers and Sumer Group. It is working on another set of deals, which will be closed by the end of this month.

Altico recently brought Naina Lal Kidwai on its board as a non-executive director.

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