HDFC Capital, the real estate private equity arm of HDFC Group, has entered a partnership with realty developer Runwal Enterprises to set up a platform focused on the development of residential projects for affordable, mid-income and upper mid-income families.
As per the terms of the agreement, HDFC Capital will be investing over Rs 1,150 crore to support the development of multiple sustainable housing projects across the country’s commercial capital.
The portfolio of projects to be developed through this partnership is estimated to generate a revenue potential over $1 billion.
“HDFC Capital is committed to forging long-term partnerships with leading developers like the Runwal Group, with a proven track record of development and delivery. Through this collaboration, we aim to address the growing demand for sustainable, high-quality homes for affordable and middle-income families in India,” Vipul Roongta, Managing Director & CEO, HDFC Capital, told ET.
HDFC Capital managed funds will provide a combination of equity and structured debt to Subodh Runwal-promoted Runwal Enterprises, formerly known as Runwal Apartments under this strategic funding arrangement.
“We are deepening our partnership with HDFC Capital through this platform which provides long-term, flexible capital to fund our growth plan and establish a presence in diverse areas of the metropolis while catering to various socio-economic segments. The funds being invested by HDFC Capital will significantly enhance the scale of operations of the Runwal Group,” said Subodh Runwal, Director, Runwal Enterprises.
The capital infused through this platform is expected to support various Special Purpose Vehicles (SPVs) for land acquisition and working capital across multiple projects in the Mumbai Metropolitan Region (MMR).
The partnership with HDFC Capital will provide Runwal Group with growth capital for new projects and support the company’s growth plans.
Since 2019, HDFC Capital has invested Rs 850 crores in the Runwal Group across two projects in Dombivli and Kanjurmarg suburb of Mumbai. The real estate private equity firm made exits with robust returns from these projects in 2022.
HDFC Capital is aligned with the government of India’s ‘Housing for All’ initiative and is focused on financing the development of affordable and mid-income homes in a sustainable manner.
HDFC Capital also seeks to promote innovation and the adoption of new technologies within the real estate sector by investing in and partnering with technology companies.
The real estate private equity firm is the investment manager to four SEBI registered category II Alternative Investment Funds. These funds combine to create a $4.2 billion platform targeting the development of affordable and mid-income housing in India.
Runwal Group, established in 1978, holds a diverse portfolio of 65 projects and millions of square feet of development spanning across residential, commercial, and retail developments.
Platform deals between institutional investors and real estate developers in India have gained significant traction, marking a collaborative approach where investors form strategic alliances with local developers to unlock opportunities across various asset classes.
These alliances allow institutional investors to leverage the on-ground expertise of developers, gaining access to pipeline projects and an established operational base, while developers benefit from substantial capital inflows to scale their projects and bolster liquidity.
