Piramal Fund Management, the real estate-focused fund of Piramal Enterprises, has invested Rs. 425 crore in a Central Mumbai project of Mumbai-based developer, Lodha Group.
The investment is towards the construction of premium residences being developed by Lodha Group with more than 5 lakh sq. ft. of saleable area. The project, which is already 40 per cent sold, is in the midst of construction, Piramal Fund Management said in a statement.
The deal has been structured as a fixed return debt investment with periodic coupon payments. It has an appropriate security mechanism in place, including hard asset cover as well as an escrow of receivables, it added.
Khushru Jijina, Managing Director, Piramal Fund Management, said: “This is our first structured deal with the realty developer. We look forward to deepening our ties as we evaluate their portfolio of projects.”
The fund also recently announced the ‘Piramal Preferred Partner’ programme whereby its selected existing development partners are allowed to draw from a pre-sanctioned limit in order to pursue opportunistic acquisitions.
Recently, Moody’s Investor Services had downgraded the ratings of Lodha citing weak operating performance with a negative outlook. The ratings firm had also said that Lodha’s ability to refinance local and foreign debt would be one of the key elements to watch out for.
Piramal Fund Management Division provides comprehensive financing solutions to real estate companies. The company also has strategic alliances with top global pension funds like CPPIB Credit Investment Inc. and APG Asset Management. The total fund under management is around $3.3 billion.
