HDFC Stress Fund for Realty Projects
Housing Development Finance Corporation (HDFC) will use part of the fresh capital it plans to raise to set up a real estate fund, in collaboration with other investors, to finance stressed projects. It will also use the fresh capital to fund inorganic opportunities and investments in existing group
Published -
Jul 7, 2020 11:36 AM
Housing Development Finance Corporation (HDFC) will use part of the fresh capital it plans to raise to set up a real estate fund, in collaboration with other investors, to finance stressed projects. It will also use the fresh capital to fund inorganic opportunities and investments in existing group businesses, its Vice Chairman and Chief Executive Officer Keki Mistry said. The fund is expected to be functional by the later part of the current financial year (FY21). HDFC will not play an active role in the working of the proposed fund, as that will be in conflict with its lending activity. It will rope in partners to run the fund instead. HDFC is yet to approach shareholders to seek their approval to raise funds. The exercise will be conducted soon after the approval is received. Mistry said, “These investments will continue to be in the financial sector, which is the core business. One of the things we would look at is the establishment of a real estate fund”. Last week, HDFC Chairman Deepak Parekh had said in a letter to shareholders that group firms have an opportunity to grow through mergers and acquisitions (M&As) because of the current crisis. The subsidiaries need additional capital to prepare for this, he had said. “We are now emerging into a scenario where there may be inorganic opportunities for our group firms. Some of our subsidiaries will need additional capital for expansion. We have also identified new investment opportunities to help build the next generation of value creators,” Parekh wrote in the annual report.
Tags : News/Views Latest News Real Estate HDFC STRESS FUND stressed projects