BANGALORE: Bangalore-based realtor Century Real Estate has redeemed Rs 100-crore non-convertible debentures (NCDs) that it raised through Kotak Mahindra Prime.
In 2010, the builder had raised funds by selling 80% of the book to high net worth individuals (HNIs), corporate investors and Kotak Mahindra Prime, a nonbanking finance company. The fund is being used to develop seven new projects with a built-up area of 1.7 million sq ft.
"We do not have any outstanding to the NBFC," said P Ravindra Pai, managing director, Century Real Estate Holdings, confirming the development NCDs are unsecured bonds that cannot be converted into company equity or stock and usually have higher interest rates. This instrument, which offers healthy yields of over 20%, has emerged as this year's tool-of-choice for real estate firms. Century Real Estate is now raising additional Rs 100 crore to retire debt.
Over the past two years, the company had raised Rs 410 crore in four tranches through NCDs from Anil Ambani-owned Reliance Capital, JM Financial and Kotak Realty Fund. It had also raised $125 million from Goldman Sachs in 2008-09, and is looking to exit the investment.
As per Venture Intelligence, private equity-real estate investment in the first six months of 2013 was valued at $887 million across 20 deals with disclosed values. The recorded transaction was down 16% at $659 million across 22 investments during the same period in 2012. Some of the large transactions that were closed earlier this year include Ascendas Trust's Rs 600-crore acquisitions of 2 million sq ft of office space in Hyderabad from Phoenix Group and Xander's Rs 280 crore investments in Supertech's 125-acre township project in Gurgaon. The real estate firm is consolidating its business by creating 45 special purpose vehicles or 1,200 acre land parcel under the holding company.