HDFC Capital and Cerberus have partnered to form a special situations platform for the Indian residential real estate sector.
In a BSE filing made after market hours on Thursday (1 April 2021), the housing financier said that HDFC Capital Advisors (HDFC Capital) and an affiliate of Cerberus Capital Management (Cerberus) have partnered to target the creation of a special situations platform focused on high-yield opportunities in the Indian residential real estate sector.
The platform will seek to purchase inventory and provide last-mile funding for under construction residential projects across India, among other real estate-related opportunities.
The development of the platform is in response to a series of shocks to the Indian residential real estate market that have created a significant need for capital. Many buyers have been unwilling to fund projects in advance of completion while traditional financing channels have come under severe pressure.
The platform intends to partner with quality developers to provide capital solutions and expedite project construction and completion.
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Deepak Parekh, Chairman, HDFC, said: "Lack of buyer confidence in the ability of developers to complete projects combined with a slow-down in funding for real estate projects has resulted in developers being starved of capital to complete on-going projects. This Platform, in partnership with Cerberus, has the potential to provide an impetus to the real estate sector by providing capital solutions to developers and restarting stalled housing projects."
HDFC Capital Advisors, a 100% subsidiary of HDFC, provides investment management services for real estate private equity financing and is one of the largest fund managers in the country.
Separately, in regulatory filing made on Saturday (3 April 2021), HDFC informed that its individual loan business continued to see strong improvements during the quarter ended 31 March 2021.
During the quarter ended 31 March 2021, pursuant to the buyback option embedded in the home loan arrangement between the corporation and HDFC Bank, the corporation assigned loans to HDFC Bank amounting to approximately Rs 7,503 crore compared to approximately Rs 5,479 crore in the corresponding quarter of the previous year.
Individual loans sold in the preceding 12 months amounted to approximately Rs 18,980 crore as compared to approximately Rs 24,127 crore worth of individual loans sold in the previous year.
Gross income from dividend for the quarter ended 31 March 2021 was Rs 110 crore as against Rs 2 crore in the same period last year.
HDFC is engaged in financing by way of loans for the purchase or construction of residential houses, commercial real estate and certain other purposes, in India.
HDFC's standalone net profit tanked 65.05% to Rs 2,925.83 crore in Q3 December 2020 from Rs 8,372.49 crore in Q3 December 2019. Total income stood at Rs 11,716.34 crore in Q3 FY21, dropping 42.25% from Rs 20,291.45 crore in Q3 FY20.
The HDFC scrip fell 3.50% to currently trade at Rs 2442.35 on the BSE.
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