Money & Banking

Investcorp plans NBFC for affordable housing

KR Srivats New Delhi | Updated on December 19, 2019 Published on December 19, 2019

Rishi Kapoor, Co-Chief Executive Officer, Investcorp

Sees opportunity in last-mile funding for residential projects, ‘urbanisation’ drive

Investcorp, a leading global alternative asset manager, is in the process of setting up a non-banking finance company (NBFC) focussed on providing credit for affordable housing and, among other things, addressing the last-mile funding aspect, its CEO Rishi Kapoor has said.

This global provider and manager of alternative investment products, managing about $27 billion of assets across private equity, real estate, absolute return investments and credit, believes this is the right time to enter the affordable housing space as the past challenges are in the process of being resolved and the first signs of gradual recovery in the realty sector is under way. “Last mile funding is a much-needed facility for residential real estate. We see this as within the affordable housing umbrella focus we are having on the NBFC being set up. NBFC will be up and running in the next few months. Very specifically, we see last-mile funding as an opportunity”, Kapoor said.

Last-mile funding issues had affected the residential real-estate market, prompting the government itself to recently intervene to set up a ₹25,000-rore alternative investment fund to provide relief to developers with unfinished projects so as to ensure delivery of homes to buyers.

It may be recalled that Investcorp had entered the Indian market last year through the acquisition of the private equity and real-estate funds businesses of IDFC Alternatives.

Through its private equity India fund, Investcorp has invested in seven companies in the country.

Urbanisation wave

Investcorp is keen to ride the ‘urbanisation’ mega trend expected in India in the next three decades. Between 2018 and 2050, India alone is projected to add 360 million people to its cities, said Kapoor, citing Investcorp’s latest whitepaper ‘A Different India: Opportunities from India’s Urbanisation Dividend and Structural Reforms’.

India is today where China was in 2000. Its cities already contribute 75 per cent to the country’s GDP, according to this paper.

Kapoor said that the ‘urbanisation’ mega trend will unlock large markets in housing, consumer tech, healthcare and financial services in India, and Investcorp is positioning itself to focus on these four sectors in the coming years.

“We see India as a long term secular opportunity. We are happy with how we have started of in India. We believe India’s robust economic growth will continue for several decades, thereby creating a nice array of compelling investment opportunities from a risk-reward perspective over the long term period”, Kapoor said.

Published on December 19, 2019
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