Provident Housing Ltd (PHL), a wholly-owned subsidiary of Puravankara Ltd, is in active discussions with HDFC Capital Advisors to secure a funding of over Rs 1,000 crore to support its expansion plans.
The proposed funding will be in the form of equity and will be utilized to construct mid-income housing projects in key southern markets, including Bangalore, Chennai, and Hyderabad. Additionally, Provident Housing aims to venture into new markets as part of its growth strategy. The discussions are ongoing, and the fundraiser is expected to be finalized in the upcoming quarters, subject to the terms of the agreements. Both companies will likely establish a joint platform for acquiring and developing residential properties.
HDFC Capital Advisors is anticipated to invest in a new platform in collaboration with Provident through HDFC Capital Affordable Real Estate Fund 3 to execute real estate projects. This investment is projected to yield a gross development value (GDV) exceeding Rs 3,500 crores, allowing Provident to strengthen its presence in existing regions further and explore opportunities in additional property markets.
Furthermore, Provident is expanding into new cities such as Mumbai and Pune, to double its residential portfolio from the current 13.82 million square feet to over 20 million square feet. Provident plays a pivotal role, contributing half of the parent company's business, and is looking to significantly expand its portfolio, especially considering the thriving domestic residential sector.
As of the time of this report, HDFC Capital could not be reached for comment, while Puravankara declined to provide any official statement. Provident Housing is actively engaged in ongoing projects spanning 11.32 million square feet across various locations, including Bengaluru, Mangalore, Chennai, Coimbatore, Hyderabad, and Goa.
It is worth noting that HDFC Capital, through HDFC Capital Affordable Real Estate Fund 3, has recently forged partnerships in the real estate sector. This includes a joint platform with TVS Group’s real estate arm, Emerald Haven Realty, with a commitment of Rs 1,000 crore for plotted developments in South India. Additionally, they have formed an alliance with the House of Abhinandan Lodha for a joint venture platform with investments exceeding Rs 1,500 crore, aimed at land projects, including plotted Undertaking projects and constructing low-rise developments in prime real estate markets across India
In 2020, the IFC Emerging Asia Fund invested $76 million in the Puravankara Group to support their affordable housing projects in India. The firm has also expanded into the Kochi market, with a 3.4 million-square-foot development project expected to generate a sales value of Rs 3,000 crore. IFC played a significant role in funding this particular project.
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