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Altico Capital invests Pune realtor Pharande

In the middle of an ongoing liquidity mayhem and credit squeeze, Abu Dhabi Investment Councilbacked real estate-focused non-banking financial company (NBFC) Altico Capital India has extended funding of ₹100 crore to Pune-based realtor Pharande Group, said two persons with direct information of the development.  
“The new funding is a top-up transaction as the developer is an existing borrower of Altico. This is an extension of an existing relationship,” said one of the persons mentioned above. The NBFC, promoted by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners, has so far sanctioned Rs 600 crore towards the group’s projects through multiple transactions and has achieved exits in some of them. The latest funding has been made for a tenure of five years.
Pharande Group, through the latest transaction, has tied up construction funding for an additional phase of its ongoing residential project Puneville located at Punawale on the outskirts of Pune city in the PCMC area.
The group is developing affordable one and two-bedroom apartments with prices starting from Rs 30 lakh. It also has residential apartments with three and four-bedroom configuration targeting mid-income group.
The residential township project has around 3 million sq ft saleable area. The construction of the project started in 2016 and is scheduled to be completed by 2024 in multiple phases.

Both Altico Capital India and Pharande Group declined to comment on the story. Real estate-focused boutique investment bank Elysium Capital, which acted as the sole advisor for the transaction, also refused to comment.

The financing assumes significance in the backdrop of the past two month’s developments relating to NBFCs. Liquidity pressure and increasing caution among lenders, especially NBFCs, have prompted them to go slow on refinancing the debt of real estate developers.

Money entering the system through new funding transactions has also come down significantly.

While established developers with proven track record still have access to funding, mid-sized developers operating in not-so-lucrative markets are finding it difficult to get their loans refinanced, industry experts said.

On Thursday, real estate developers have sought the government’s intervention to ease the credit freeze in the realty sector amidst lack of funds to developers to complete their projects.

Realty developers’ body Confederation of Real Estate Developers' Associations of India (CREDAI) has written to Prime Minister Narendra Modi seeking the government’s intervention in the matter.

The builders’ body said the situation is affecting the real estate eco-system, with home buyers not getting timely possession of their homes.

Realty developers acknowledge that the sector is expected to be a beneficiary of multiple reforms, foremost being the Real Estate (Regulation & Development) Act, or RERA and the Goods & Services Tax (GST).

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