Altico Capital invests ₹1,250 cr in realty projects

December 21, 2017

HYDERABAD, DECEMBER 21: Altico Capital, the non-banking finance company, promoted by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners recently deployed Rs. 1,250 crore across five deals in Hyderabad and Pune.

Altico invested Rs. 500 crore across two deals with Hyderabad-based Phoenix group for construction and development of IT SEZ projects, Rs. 375 crore with Marvel group in Pune for a bouquet of projects, Rs. 240 cr with Pharande group for development of township project and Rs. 130 crore with Mumbai-based Jatia group for their residential project.

Phoenix group, based in Hyderabad, is a developer of commercial projects, having successfully delivered more than 7 mn sq. ft. and currently executing projects around 19 million sq. ft. Altico-funded project is located in the prime commercial area of Hitec City having presence of global IT and e-commerce giants like Google, Facebook, Amazon, etc. Additionally, Altico funded the construction of another IT-SEZ in Hafeezpet which is pre-leased to a global professional services firm. The Phoenix group has continuously demonstrated expertise in leasing commercial spaces to companies like Amazon, IBM, Cognizant, HCL Technologies, Capgemini, etc. as well as selling pre-leased spaces to institutional investors. "Phoenix is an existing partner of Altico Capital. With this transaction, the cumulative amount sanctioned by Altico to the Phoenix group has moved to Rs. 725 crore," mentioned Sanjay Grewal, CEO, Altico Capital.

Marvel group, a prominent and diversified developer based out of Pune has delivered close to 24 million square feet since 2001. Altico’s fund shall be utilised to develop five under construction projects at various prominent locations in Pune along with two projects in Bangalore. Out of the 5 projects in Pune, three of them are in advanced stages and one is at land stage. A significant portion of these funds shall go towards its under-construction projects, providing them with the much needed impetus post RERA to ensure timely delivery.

Pharande group, where Altico invested Rs. 240 crore, shall be utilising the said proceeds for development of a new township project located on the Mumbai Pune Expressway for developing plots and villas in the gated community project offering all amenities, having saleable area in excess of 6 million sq. ft.

Further, Altico invested Rs. 130 crore with the Mumbai based Supreme Holdings & Hospitality promoted by the well known Vinod Jatia family. Grewal added "The Jatia group shall be deploying Altico’s funding for construction of their residential project by name of Belmac Residences in Pune and partly for additional land acquisition by the group." The group is a well-known business family from Mumbai having more than three decades experience in running successful businesses including Hyatt properties, WIMCO, Bell Ceramics to name a few. The real estate business of the group is now led by two sons of Vinod Jatia, Prateek and Vidip Jatia. R

Recently, Altico had announced that it expects to deploy Rs. 3,000 crore in the balance part of FY18 in the wake of the Modi government's forward looking policies which make the real estate sector much more robust, organised and transparent. Commenting on its loan book build up, Sanjay Grewal, Chief Executive Officer, Altico Capital said: “These deployments reflect Altico’s continued focus on segments such as affordable and mid-income housing which make up more than 50% of our current portfolio. It further demonstrates our intent to build on our existing strategy of funding developers engaged in completion of their under-construction projects and increasingly focus on commercial / office RE funding opportunities which currently stands at 15% of the portfolio”

Since inception, Altico has deployed more than Rs. 8,500 crore across 100+ projects covering more than 100 mn sq ft area in 7 cities and continues to maintain strong asset profile. “We continue to maintain healthy asset quality of nil NPAs for the fifth consecutive year of our real estate lending business, even in an environment impacted by the temporary disruptions caused by otherwise stable government policies around demonetisation, RERA and GST, thereby demonstrating our high underwriting standards and superior asset management practices ” added Sanjay Grewal.

Altico's existing balance sheet size of close to Rs. 6,500 crore stands well diversified across 7 cities with close to 90 per cent of its portfolio being last mile financing. With sufficient liquidity on the backdrop of Rs. 5,000 cr debt raised during last 18 months, Altico intends to diversify its asset base with a focus on exploring new capital starved segments such as industrial and warehousing space.

Altico Capital recently reported a 48 per cent on-year jump in net profit at Rs. 173 crore for the half year ended September 2017. Revenue for the period also increased 80 per cent to Rs. 429 crore.

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