Piramal cashes in on Calcutta realty

Calcutta: Piramal Capital, one of the largest real estate-focused non-banking finance company in India, has formally entered the Calcutta market.

The company, which has set up an office here, plans to deploy Rs 1,500-2,000 crore in the next 18-24 months in projects across the spectrum.

"We have the appetite. If the demand is there...For the right type of partners and developers, we will not shy away giving them. We will be able to meet their entire requirement," Khushru Jijina, managing director of Piramal Capital & Housing Finance, said.

In the past, Pirmal had invested in two projects with Forum Group and Ideal Group. But it did not have an office here. It is scouting for more opportunities.

According to Jijina, Piramal offers an entire bouquet of financing option to a developer, from private equity, mezzanine debt and structured debt to construction finance and lease rental discounting.

In four years, the company has managed to substantially grow its exposure to the real estate industry. It is working with around 140 developers involving 450 projects, mainly in Mumbai and Bangalore. It has also forayed into the National Capital Region (NCR), Pune, Chennai and Hyderabad.

The company has also received the licence to operate housing finance business for end users. Piramal is also managing real estate investment trusts in a fiduciary capacity.

Growth factors

Several factors have contributed to the rapid growth of NBFCs such as Piramal Capital in the real estate sector, industry participants said. At a time bank loans are hard to come by and buyers are preferring completed projects over under-construction ones, funds to start projects have dried up.

"Piramal Capital has allowed real estate companies to access capital and at a reasonable cost. It has a range of products to suit every developers need," Rahul Saraf, MD of Forum Projects, said.

Apart from a few small PE and debt deals, the Calcutta market did not see the entry of established players such as Piramal, mainly because of the small volume. However, Sumit Dabriwal, managing director of Highland Group, said Calcutta has matured for big players such as Piramal.

Jijina was in town to participate in an interaction organised by the Indian Chamber of Commerce and real estate body Credai. He participated in a chat with Anuj Puri, chairman of Anarock Property Consultants Pvt Ltd. "The Calcutta market is lot like Pune. But Pune has problems because it has more supply. Here the supply and demand is still matching. It is a smaller market than Mumbai or Bangalore but it is not a market to be ignored," Jijina said after launching Anarock's report on Calcutta.