The private equity firm Everstone, that is focused mainly in India and South East Asia considers real estate lending a huge opportunity in the current scenario and is presently evaluating on setting up a credit fund so that it can be a potent lender to the real estate sector in India.
Everstone was founded in 2006 by Sameer Sain and Atul Kapoor and has over 260 experienced professionals focusing on various geographical locations and manages assets over $ 5 billion in private equity, real estate and green infrastructure, along with venture capital.
What Everstone brings to the table?
They have a fund type credit vehicle and the focus is on real estate in India and it has the capacity to deploy $2 billion. They are presently on talks with some investors. They consider that no one is lending money to real estate groups because of severe cash crunch in the sector but they still believe it to be a good time for investment.
The liquidity crunch had greatly affected the Indian non- bank lender that followed the default of the Infrastructure Leasing and Financial Services in September 2018 and the rate of slow sales in the housing sector. The real estate focused lender Altico Capital defaulted on INR 20 crore in interest payment on an ECB loan and DHFL was one of the earliest lenders to be hit with liquidity crunch and is presently negotiating a restructuring package with its lenders.
The macroeconomics scenario is such that the lenders are focusing more on strategy around cash flow. It is important to look at cash flow in the absence of refinancing and the ability to determine what to do with the cash flow in case of a default which underlines the basic strategy for the credit fund.
More updates to be noted
Everstone has also recently added renewable energy to its line of products and is also considering investing in digital infrastructure. A lot of time is being spent on the latter and at present the firm is considering investing more in physical storage than in virtual storage. A partnership was announced last year between National Investment and Infrastructure Fund on India as it announced a partnership with the UK government for the launch of Green Growth Equity Fund. NIIF and the UK government have also committed 120 million pounds for the fund that is going to be managed by the joint venture of Everstone Group and Lightsource BP, EverSource Capital.
According to Sain, one billion dollars would be allocated to India in the form of renewable assets and they would comprise of solar, wind, e- mobility, water and waste management. The investment would be done over a period of 5 to 6 years and in a gradual way in which opportunities present themselves.