Arvind SmarSpaces and HDFC RE Fund partner for residential development.

Arvind SmartSpaces Limited (ASL) and HDFC Capital Advisors (HDFC) have partnered to create a separate platform for the residential development.

Key points to note –

  • Subject platform will be a 100% subsidiary of ASL.
  • Total fund infusion is envisaged at Rs 900 crore in multiple tranches as and when required
    • Rs 300 crore from ASL as equity/ preference shares/ convertible debentures or any other instrument as mutually agreed
    • Rs 600 crore from HDFC as Optionally Convertible Debentures
  • The funds will be utilised for acquisition of new projects for residential developments in the cities of Ahmedabad, Bangalore, Pune and MMR.
  • ASL’s role will be of execution and HDFC’s of investment management.
  • The Platform is estimating to create an overall revenue potential of Rs. 4000-5000 cr excluding the reinvestment potential.

Rationale for the transaction/ partnership

This is a typical HDFC (fund) kind of investment where it takes exposure in specific projects as it finds suitable and circumferences it’s investment from larger corporate level risks.

To ASL, it provides a significant funding source and hence enlarges it’s scale of operations.

Does it make ASL as a stock exciting

Ideally it does as the new platform would be a 100% subsidiary.

HDFC’s presence will surely bring discipline in the operations of the platform that in turn adds to the overall comfort.

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