DHFL Venture Capital, the asset management arm of Dewan Housing Finance Corporation, is raising $ 250 million for its second international realty fund.
The fund will close in two tranches, with the first tranche of $ 100 million expected to close in two months. However, the company has not set any time-frame for raising the entire corpus of the fund.
Dewan Housing Finance Chief Financial Officer Prashant Chaturvedi said that the money will be raised from offshore investors. "DHFL will have some share in the fund depending on what the National Housing Bank permits."
The company had launched its first local fund of Rs 100 crore (Rs 1 billion) two years ago with DHFL investing Rs 35 crore (Rs 350 million) while the remaining Rs 65 crore (Rs 650 million) was raised from banks and financial institutions. The money from the local fund has been invested in real estate projects in Hyderabad, Bangalore and Pune.
In addition, Dewan Housing Finance, the parent entity, is also looking to raise Rs 150 crore (Rs 1.5 billion) to bolster its operations. The fund-raising may also be in the form of equity dilution. "We are considering various options. We are in talks with potential private equity players and waiting for the markets to stabilise," Managing Director Kapil Wadhawan told Business Standard.
DHFL, which registered a compounded annual growth rate of 35 per cent during the last five years, is hoping to increase its portfolio by over 20 per cent during the current financial year. The slowdown is being attributed to the present economic situation where high interest rates and property valuations are forcing many borrowers to defer purchase of houses.
"Over the next two-and-a-half years to three years, we are targeting a balance sheet size of Rs 10,000 crore (or Rs 100 billion compared with Rs 4,500 crore or Rs 450 billion now)," Wadhawan said, adding that the company intends to leverage its existing network and focus on fee-based income.
"Companies have seen the cyclical nature of the business. So, they understand the challenges. Those who have deep pockets will continue to operate in the market," said Wadhawan.
