MUMBAI: PAG Asia, one of the largest global alternative investment managers, will invest ₹400 crore in bonds of a M3M India group entity to refinance existing debt and acquire land, said people with knowledge of the matter.
PAG’s Asia Pragati Strategic Investment Fund will invest in Lavish Buildmart, a 100% subsidiary of M3M India – the real estate developer whose promoters were questioned by the Enforcement Directorate last year for unauthorised transactions with the IREO group.
The bonds will be raised for three years and nine months, which will include a moratorium period during the first five quarters. It will pay a 15% interest rate annually with an IRR (internal rate of return) of 18.5%, the people said.
The proceeds of the funds will be used to repay ₹360 crore unsecured loans raised by Lavish Buildmart from its affiliate Union Buildmart. It raised unsecured loans for land acquisition. A part of the proceeds will be used to buy land for the ‘M3M The Cullinan’ project.
PAG Asia and M3M India did not respond to ET’s request for comments.
Lavish Buildmart is engaged in developing the real estate project ‘M3M The Cullinan’ in Noida, which comprises four segments: resident, retail, office, and mall projects. It has incurred ₹713 crore out of ₹4,365 crore cost until the end of December 2023. The project is expected to be completed by April 2028.
In June 2023, M3M promoters Roop Kumar Bansal, Basant Bansal and Pankaj Bansal were questioned and detained by the investigation agency regarding unauthorised transactions of ₹404 crore with IREO group. While none of them are on the board of Lavish Buildmart, it is 100% owned by M3M India.
According to an agency report dated July 18, 2023, the investigation conducted by ED has shown that the purported reason for the transaction was the sale of development rights of land, which was found to be valued at ₹4 crore only but for which ₹404 crore was received from 10 IREO group companies by five shell companies followed by four more shell companies, all of M3M group.
On February 21, 2023, ET reported that M3M India has secured a ₹1,500 crore debt facility from PAG Credit and Markets, and as per the deal, the money will be given in four tranches within 18 months.
