World Bank affiliate International Finance Corporation (IFC) and its affiliate IFC Emerging Asia Fund (EAF) have partially exited their investments in Puravankara Group’s affordable housing project in Bengaluru, according to a top executive.
The exit — from 1.4 million square feet plotted development project spread over 60 acres — was at an internal rate of return of 20%. The project is at an advanced stage of completion with 80% of the houses sold out. IFC had invested Rs 157 crore in the project over the last two years.
“The balance amount of Rs 230 crore will be deployed in the coming quarters as we are identifying the projects,” said Abhishek Kapoor, CEO of Puravankara. “We have already invested Rs 322 crore of the total funding received from IFC.”
Separately, IFC EAF had invested Rs 165 crore in the development of an affordable housing project in Kochi, spread over 3.48 million sq ft.
“The tenure of the investment is 7-8 years from the time of deployment. There are various options for exit, including refinancing once the projects are ready,” said Kapoor. “We are also in the process of identifying other projects for the balance amount to be deployed and raising further capital from IFC.”
In 2020, IFC had partnered with the Puravankara Group to invest Rs 552 crore in the development of four-five residential projects under the ‘Provident’ brand, which is focused on affordable housing.
The company has 12.36 million sq ft of projects under construction across the Puravankara and Provident brands. Over the last two-three quarters, the company has invested over Rs 100 crore towards the launch pipeline of 15 million sq ft for FY23, with a project value of Rs 9,000 crore.
Record low home loan rates, sops from realty developers and the Covid-19-led demand for home ownership has given momentum to sales after a lull in the April-June quarter that was marked by the pandemic’s resurgence and restrictions imposed by state governments.
According to JLL, the top seven property markets in India recorded over 124% year-on-year jump in housing sales in the July-September quarter. The country began to cautiously return to normal economic activities supported by the nationwide vaccination drive. Sequentially too, housing sales in the quarter increased by 65% to 32,358 apartments, according to data from JLL India.
