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Ajay Piramal-owned Piramal Enterprises Ltd has entered into a strategic partnership with Ivanhoé Cambridge, a subsidiary of Canadian pension fund CDPQ, to provide equity capital to developers of residential projects. Ivanhoé is allocating an initial corpus of $250 million (approximately ₹1,700 crore).
This is Ivanhoé second attempt to enter the Indian market. It had made a foray in 2008 but later wound up its operations here for lack of opportunities in the retail real estate segment.
Debt and equity “Given the scale of our existing real estate offering and roster of existing developer relationships, the partnership will enable us to execute on very compelling opportunities to deliver high quality residential developments in the local market that we service,” said Ajay Piramal, Chairman, Piramal Enterpises.
Piramal will make debt as well as equity investments in the realty segment via this venture.
Khusru Jijina, MD, Piramal Fund Management, said the company is in talks with various developers. “We expect to deploy at least ₹200 crore each in six-eight deals in the coming months,” Jijina said.
He added that the company will also commit an additional amount alongside and co-invest 25-50 per cent in each transaction. The investment focus is on Mumbai, Delhi-NCR, Bengaluru, Pune and Chennai.
Michael Sabia, President and CEO, CDPQ, said in a statement: “India represents a key market for our global growth. We look forward to a long-term and fruitful business relationship with Piramal in the years to come.”
CDPQ (Caisse de dépôt et placement du Québec) already has a presence in India. Ivanhoé held more than C$55 billion in assets as on June 30, 2016.
Interestingly, Piramal also has an existing $500-million joint venture with Canada Pension Plan Investment Board (CPPIB) for lending to housing projects in major cities. CPPIB, Canada’s largest pension fund manager, has so far invested $3 billion in various sectors.
Piramal Enterprises also has a tie-up with Dutch pension fund manager APG Asset Management. Piramal has close to ₹20,000 crore in its lending book to key developers in five metros. It recently also introduced Flexi Lease Rental Discounting for completed commercial assets and sanctioned laons worth ₹2,000 crore.
In January, the company’s board cleared plans to launch a housing finance firm.
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