Tata Housing, the real estate arm of the Tata Group, is looking to invest over R2,000 crore to acquire new projects in the next financial year, 2013-2014. The company may look at setting up a real estate fund, and also look at a mix of other options like equity, internal accruals, mezzanine and debt financing for its new ventures.
?We are evaluating several options for raising funds such as setting up of RE (real estate) fund and equity/mezz funding in our new ventures. We also plan to access the debt capital market to meet some of our funding requirements next year,? Brotin Banerjee, MD and CEO, Tata Housing, told FE in an e-mailed response.
In 2013-2014, the company will be launching around 15-20 million square feet of projects and will continue to expand its presence across the 10 metros and emerging cities. Tata Housing expects to launch projects across its consumer segments in Maharashtra, National Capital Region, Bhubaneswar, Bangalore and Kolkata, he said.
The company, which has a presence in affordable as well as premium segment of residential real estate, says there will be equal focus on both ends of the market in the coming financial year, and it has dedicated resources to exclusively focus on both the companies. ?We have launched projects across all segments and both companies, i,e, Tata Housing and its subsidiary Smart Value Homes Limited (SVHL) will continue to expand their portfolios,? says Banerjee.
In November 2012, Tata Housing raised around R62 crore as a private equity investment from a US-based private Portman Holdings for its luxury housing project ?The Promont? in Bangalore. Portman picked up a 26% stake in the project which is valued at about Rs 240 crore.
A month later, in December, Tata Housing raised R300 crore by issuing non-convertible debentures (NCDs), which it said was subscribed by IDFC and another mutual fund. The issuance was for maturity periods ranging from 3-5 years. The company had then said that it has a long-term credit rating of ?AA? from rating agencies ICRA and CARE.
Banerjee said that the company has been able to raise funds at very competitive rates. ?The company also has the highest short-term credit rating of ?A1+? which has helped it raise funds in the Commercial Paper market at competitive rates,? he added.
Tata Housing has a pan-India presence, with 60 million square feet space under various stages of planning and execution.
