Essel Finance plans to raise huge sums from the overseas and domestic markets
Essel Finance plans to raise Rs. 2,300 crore from the overseas and domestic markets this fiscal year. This money will be used to finance the real estate projects. The banks are reluctant to lend and this situation has created a demand for the alternative funding options.
Unlisted Essel Finance’s plans include raising $300 million (Rs. 1,800 crore) overseas and Rs. 500 crore from the home market. It has already raised $105 million in the Singapore market and Rs. 100 crore in India through separate alternative investment funds.
About a fortnight ago some banks based in Asia and a French company invested in the overseas fund. In the domestic market, the money was raised in July. It plans to raise the remaining money by the end of the fiscal year through March 2015.
A number of non-banking lenders have started financing real estate companies as the banks reduced their lending to the real estate sector due to their worries about bad debts. For non-banking lenders like Essel Finance, this offered a risky, but high-return investment opportunity. Amitabh Chaturvedi, the Managing Director of Essel Finance stated that it is a risk category. However the risk can be mitigated if one does the documentation well and selects the right project. High risk and high returns always go hand in hand. The investors who do not have a high risk appetite can always choose the safe options like fixed deposits and Kisan vikas patra.
Source- The Economic Times
alternative funding options, Amitabh Chaturvedi, Essel Finance, High risk, overseas and domestic markets, Real estate projects
