Piramal Fund is planning to invest Rs.1200 crore in Omkar Group's residential project

Q: Hi, the deal considers significance as being one of the largest single real estate project financing transactions in India.

Shaunak Verdla, Mumbai

1st April 2015

Real estate News in Mumbai

real estate investment

piramal fund management

omkar realtors & developers

luxury residential project omkar

omkar 1973

Follow Discussion

Also see discussions for

Mumbai Real estate News Real estate News in Mumbai

Replies (9)

Of these, 2 investments were made in self-development projects being implemented under the brand "Address Makers" in Whitefield and Electronic City, Bengaluru. The 3rd partial exit was made through interest payments received from an investment with the Marvel Group in Pune.

Somesh Venkatesh, Bangalore

20th August 2015

Comment

The fund recently raised Rs 200 crore from high net-worth individuals in less than 30 days for investing in a south Mumbai project.

It clearly indicates that whether there is a slow market or a fast moving market, projects with combination of right location, right ticket size, price and a good developer brand is working even now.

Priyadarshini, Pune

20th August 2015

Bilkul Sahi kaha......Alls well that ends well........
As per Jijina, MD, Piramal Fund Management, is also planning to launch one more fund in the domestic market soon and this will invest in mid-income projects. They are working on one more fund raising proposal but the fund size and the structure of the same is yet to be finalized.

Devika, Mumbai

20th August 2015

With the exit from Omkar 1973, the fund will make its first full exit thus, resulting in 4 of the 8 transactions having generated a return at this stage. This is also one of the first major exits for any private equity fund from a super-luxury project.

The company has managed to sell more than half the project so far and around 5 lakh sq-ft under the 20:80 payment scheme alone,

Sankalp, Mumbai

20th August 2015

Hi folks,
Did you all hear the news. Piramal Fund Management to exit from Omkar's Worli residential project for Rs. 500 crore. The company plans to exit from two more projects, worth Rs 150 crore, in the coming quarters.

Siddharth Rana, Pune

20th August 2015

Comment

It's true..........the company had invested around Rs 200 crore in Omkar's luxury project Omkar 1973 in Worli in 2011. Though there is a slowdown in the realty market, they have managed to exit their investment at an internal rate of return of 24% which is around Rs 500 crore.

Sankalp, Mumbai

20th August 2015

@Sankalp,
The exit is valued in total returns of around 146%, while annual returns are calculated at 24%. The fund had invested Rs 200 crore between August and December 2011 as equity capital. The term sheet for the exit from Omkar's Worli project has already been signed, while the transaction will be concluded by December.

Siddharth Rana, Pune

20th August 2015

Yes, Piramal fund had made this investment from Indiareit Domestic Scheme IV, which was raised in June 2010 with Rs 922 crore corpus site across 8 transactions. The fund has already returned Rs 106 crore out of this to investors from 3 one-sided exits.

Devika, Mumbai

20th August 2015

As per the sources the company is not in a rush to launch the offshore fund. They are taking more time in building relations overseas. They want to do an initial closure first and then they will launch the fund.

Sankalp, Mumbai

8th April 2015

Comment

@sankalp,
It is also came to know that Indiareit had at first planned to raise $500 million from its overseas fund and launch it in May this year from investors in Europe, Asia and Australia, but later decrease to $300 million and also put off the launch due to difficult market conditions.

Deepankar Godbole, Mumbai

8th April 2015

In FY15, 85% of PFM s loan book was determined as debt and equity investments were in the range of 10-15%. PFM closed FY15 with a loan book of Rs 4400 crore, which expanded more than two-fold from Rs 1900 crore in FY14. However, the firm expects the part of equity investments to rise up to 40% in FY16.

Sankalp, Mumbai

8th April 2015

Comment

Pointing to the tough market conditions, industry sources told that even HDFC Property Fund had taken 1 & 1/2 yrs to bring up money from international investors for its new overseas fund. Earlier, HDFC Property Fund has brought up $200 million from the Government of Singapore Investment Corp, investment firm Temasek and Oman's State General Reserve Fund.

Deepankar Godbole, Mumbai

8th April 2015

Hi all,
Piramal Group, is in early talks with sovereign and pension funds to raise up to Rs 2200 crore offshore fund on the private equity platform. This is separate from the $150 million that Piramal is in the process of raising from overseas limited partners as part of its overseas fund-raising. Of the $150 million, the company has already raised $50 million from LPs.

Sankalp, Mumbai

8th April 2015

Comment

Right Sankalp,
The company's Managing Director told Fe that the technique will ensure capital availability for a longer duration like 8-10 years as they were expecting a rebirth in demand for equity investments by realty developers.

In February 2014, Piramal agreed upon a joint venture for $500 million with Canada Pension Plan Investment Board to offer rupee debt funding to residential projects in Mumbai, Delhi, the National Capital Region, Chennai, Pune and Bangalore. Both the organizations made an first commitment of $250 million each.

Deepankar Godbole, Mumbai

8th April 2015

Right Gurmeet,
I also read that the developer had recently launched 20:80 payment scheme at the project and had managed to sell over 4 lakh sq-ft space. Of the total project size of 2.4 million sq-ft, the developer has so far sold around 1.2 million sq-ft including the bookings of 4 lakh sq-ft under the recent offer.

Abhishek,

4th April 2015

Comment

Project details:- The project, Omkar 1973 with 3 high-rise towers is spread over an area of 9 acres off Dr. Annie Besant Road. The under-construction project is being designed by Foster + Partners and has received all approvals. Of the 3 towers, 2 are midway to completion and are expected to be delivered by the end of 2017.

Gurmeet,

2nd April 2015

Comment

Hi Abhishek and Harmeet,
I would like to explain some points that this is a novel structure with a blend of senior debt and also project funding secured against an exceptionally effective 20:80 plan in a project that is clearly settled with around 60% sales and noticeable development progress.

Sandeep Mhatre, Mumbai

2nd April 2015

Comment

Well Sandeep ,
As i know, the developer will be using Rs 400 crore to part refinance its current senior money lenders against charge on the cash flows and improvement rights of the project. The balance Rs 800 crore will be obligation secured against a 20:80 plan and is expected to be drawn as a line towards development progress throughout the following 2 years.

Abhishek,

2nd April 2015

The deal assumes significance as being one of the largest single real estate project financing transactions in India. The real estate investment platform of Piramal Enterprises will be investing in the project through debt secured against project receivables and inventory.

Abhishek,

1st April 2015

Comment

Do you know that this is Piramal Fund Management's 3rd exposure to Omkar Realtors & Developers' project Omkar 1973. The fund had earlier made an equity investment of Rs 200 crore in the project and extended debt of 130 crore.

Harmeet Kaur,

1st April 2015

According to Khushru Jijina, Managing Director, Piramal Fund Management, the outstanding debt of Rs 120 crore on the project is expected to be repaid by December and equity is investment is also scheduled to be registering an exit in a year's time.

Chandra Kantraut, Pune

2nd April 2015