Puravankara has announced the first close of INR 200 crore of its targeted AIF (Alternative Investment Fund) of INR 750 crore (including a green shoe option of INR 250 crore). The Fund will invest in a mix of plotted developments and mid-sized mass housing projects under the ‘Purva Land’ and ‘Provident Housing’ brands.
Real estate business requires huge capital; every project is like setting up a new factory. Keeping that in mind Puravankara had set up a subsidiary called Purva Asset Management last year to create multiple financing platform at a time when the banks and NBFCs are increasingly wary of financing to the real estate developers.
Puravankara with presence in 9 cities have got three brands – Puravankara in luxury; Provident in affordable; and Purva Land in plotted development. Keeping the huge capital inflow in mind, the company has set up this AIF to fund the projects.
The AIF is aimed at new green shoots and not to leverage its existing land bank, claims Ashish Puravankara, Managing Director, Puravankara Limited. The fund promises to share the top line with the investors and not the bottom line, with a minimum guarantee protection.
“This is the first SEBI-approved AIF from the house of Puravankara and is a critical step in our long-term capital strategy. As we witness significant consolidation in the realty sector, our continued focus is to ensure sustained capital flow for our growth. This Fund will create a win-win for investors and us and is part of a larger goal to manage an AUM of about INR 2000-2500 crore in the next 5 years. Many first-of-a-kind protective features have been introduced while providing a strong upside for the investors. The Fund will target an IRR of around 25%,” said Puravankara.
Puravankara received SEBI approval for the Fund early this year. The Fund has a tenure of 5.5 years and expects to deploy the corpus within the next 6 months. The Fund will be managed by Purva Asset Management Private Limited, a 100% subsidiary of Puravankara Limited, which is also the Fund Sponsor.
Shailesh Viswanathan, Fund Manager and Director, Purva Asset Management, said, “We, at Purva Asset Management, aim to build innovative capital platforms to ensure sustainable growth. The AIF will invest in 5-6 plotted and mid-sized residential projects to provide quick cash flow and enjoy the upside through steady price appreciation. We are deploying part of this Fund in two projects within the next 4-6 weeks.”
AIF Category II fund scheme is sponsored by Puravankara Ltd. (Contribution – 5% of fund) This insulates the investors from project cost fluctuations. It also provides periodic cashflow to investors from project launch itself.
Ravi Sinha
#RaviTrack2Media
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