Mumbai : Altico Capital India Limited (“Altico Capital”), a Non-Banking Financial Company (“NBFC”) promoted by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners headquartered in Mumbai, India, announced their complete exit from realty developer Phoenix Group’s IT-SEZ project in Hyderabad’s Hitec City. Altico Capital has received full pre-payment of Rs. 250 cr loan from Phoenix Group, Hyderabad.
Phoenix is an existing development partner of Altico. Altico has funded multiple projects with Phoenix in the past and has been prepaid on multiple occasions previously. Altico had sanctioned the facility in June 2018 for the land purchase and development of an IT SEZ project forming extension of an existing 5 million sq ft project a Vance Business Hub in Hitec City, the commercial business district of Hyderabad. “This transaction, once again, underscores the robust underwriting and asset management standards followed by Altico Capital” said Mr. Sanjay Grewal, CEO, Altico Capital Ltd. Talking about the exit, Mr Grewal continued, “For the full year FY19, like in each of the last several financial years, Altico’s cash realisations far exceeded its contractual cash flows. As against contractual cash flow totalling INR 1,500 cr for the full year FY19, we realised INR 3,000 cr plus on a loan book of approx. INR 7,000 cr. Post ILFS, in the last 10months, we have realised almost INR 2,500 cr of which INR 1,300 cr were prepayments.”
Mr. Grewal further added that “while the market for refinancing has been slow on account of the NBFC liquidity crisis, such prepayments came through multiple sources such as project cashflows, property sales by borrowers, asset sell downs and refinancing from several newer yield hungry FPI investors. The inflows have come from multiple loans spread across various Tier 1 cities of the country. Casa Grande in Chennai, Marvel in Pune, Skylark in Bangalore, Signature Global and Ramprastha in NCR, Manjeera in Hyderabad are few amongst many loans which resulted in prepayments and illustrate inflows from different locations and project types including residential, commercial and affordable housing. All these exits were in the mid to high teens. Altico’s Q1 FY20 revenue was INR 306 crs and PAT INR 75 crs.”
Altico will use any surplus liquidity generated to deploy in the Board approved diversification strategy moving away from lending to only residential RE segment. 45% of Altico’s loan portfolio is compliant with RBI definition of Infrastructure lending comprising mainly of affordable housing, IT/IT-SEZ and warehousing/logistics. Altico plans to further lend to Infrastructure sectors such as education, hospitality, healthcare, etc. along with diversification into retail mortgage lending. With regards to wholesale diversification, the NBFC prefers asset backed lending strategies and projects that have measurable CFs. All the sectors picked have similar characteristics similar to RE i.e. have hard assets as security and 4-5 year cash cycle that match our liability duration.