Developers look at PE and NBFC to refinance
Slow approvals and execution has caused project delays forcing real estate developers to raise capital from non-banking financial companies (NBFC) and private equity (PE) funds to refinance previous loans, repay banks or pave the way for exits by investors. PE funds and analysts point out that developers may not judged correctly on the time required for approvals which has caused a lot of delays and a lot of pressure to repay. Anuj Nangpal, managing director-investment services at property advisory DTZ India point out that PE funds and NBFCs are doing a lot of last minute refinancing.
Refinancing deals do involve an element of risk but offer assured and lucrative returns. Recently, Parsvnath Developers Ltd raised Rs.210 crore from Proprium Capital Partners, Red Fort Parsvnath Towers, in Delhi’s Connaught Place. Red Fort Capital Advisors Pvt. Ltd is an investor in the project and Proprium helped to refinance an earlier bank loan taken for the project. Proprium is a global fund and invests in emerging markets. This is its first transaction in India.
Balaji Raghavan, president- real estate practice, India Infoline Ltd informs that such delays build a lot of pressure on developers as banks and PE funds typically want to exit a project in 3-4 years, large projects take 6-7 years for development.
Source: Mint
Developers look at PE, DTZ, infoline, NBFC, NBFC to refinance previous loans, PE, Private Equity, private equity funds for developers, proprium capital partners, red fort parsvnath, refinance, refinance previous loans, REIT
