IIFL invests in Wadhwa Group’s township project
The India Infoline Ltd’s (IIFL) non-banking financial company and some of its wealthy clients have together invested Rs 150 Crore in a 500-acre Navi Mumbai township project of property developer Wadhwa Group.
IIFL has purchased non-convertible debentures (NCD) from Wadhwa Group for the project, after three years of signing agreement with the Gulf Finance House for developing the land owned by the Bahrain-based investment bank. Since 2009, NCDs is in demand after the banks tightened rules for lending to developers.
Mr. Srinivasan Gopalan, chief financial officer and chief operating officer, Wadhwa Group, says that the company has completed the process of acquiring land for the project and the development process will start now. He also says that the project is only 12 month away from its launch.
After the completion of project, Wadhwa Group will give 1.2 million square feet of built-up area to the Gulf Finance House in about eight years. This is in addition to the payment made to the Bahrain bank. The Wadhwa group collected Rs.110 crore of debt from JM Financial Products Ltd to fund a luxury project in central Mumbai. This group is famous for its office projects in Mumbai’s Bandra-Kurla Complex business district.
The Township projects in India has witnessed no profit no loss, with some of them taking off well and many running in time and money troubles mainly after 2008 economic slowdown. Though many big developers are staying away from such long-gestation, capital-intensive projects but some big projects are under process.
In the beginning of this year, Mumbai’s Lodha Group introduced a 800-acre township with an investment of nearly Rs.14,000 crore as part of its plan to develop the “Palava” project on 4,000 acres of land between Navi Mumbai and Dombivali.
Mr. Gopalan says that the company is planning to collect more money for this project but not through debt.
He also says that they are focusing on active partners in the project while the architectural hold of the development vest with them.
Mr. Ambar Maheshwari, managing director of corporate finance at property advisory says that the township development story still makes logic in terms of cash flows. He also says that the timing of project goes wrong that’s why the developers need to give suitable time duration for the completion of project.
Source: The Live Mint
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