Xander Finance, the non-banking finance company (NBFC) of investment firm Xander Group, is looking to invest close to $100 million (around R500 crore) in four to five deals in the next eight months.
?The deal size would not be very large, but we are exploring options in residential and commercial segments in real estate and other industry sectors as well,? the official told FE on sidelines of GRI Real Estate 2012. Xander Group manages equity capital in excess of $2 billion.
In the last few years, bank financing has gone tough for sectors like real estate. As Reserve Bank of India guidelines do not allow commercial banks to lend to developers for buying land and complicated deal structuring involved with private equity investments, raising funds through NBFCs is becoming an accepted norm.
Currently, the rate of interest charged by NBFC is in the range of 18-20%, which has increased from 15-16% in 2010 with the rise in interest rates.
?Unlike bank loans where the interest payment kicks in, in NBFC lending, the interest or coupon repayment schedule is flexible which gives comfort level to developers in current challenging environment, where cash flows from customers is an issue,? said Somy Thomas, director (valuation and advisory), Cushman & Wakefield India, a global real estate consultant.