Altico Capital exits Phoenix Group's IT-SEZ project in Hyderabad

MUMBAI: Altico Capital, the non-banking finance company, backed by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners, has exited completely from realty developer Phoenix Group’s IT-SEZ project in Hyderabad’s Hitec City. The developer has prepaid its Rs 250 crore loan it had raised from Altico Capital.

Altico had sanctioned the facility in June last year for the land purchase and development of an IT SEZ project forming extension of an existing 5 million sq ft project aVance Business Hub in Hitec City, the commercial business district of Hyderabad.

Phoenix is an existing development partner of Altico Capital as the NBFC has funded multiple projects of the realty developer in the past and has been prepaid on several occasions. “This transaction, once again, underscores the robust underwriting and asset management standards we have been following,” Sanjay Grewal, CEO of Altico Capital, told ET.

An official of Phoenix Group confirmed the repayment of loans ahead of schedule.

Hyderabad-based Phoenix Group has already entered into a forward sale agreement with Ascendas-Singbridge for the sale of two buildings in the IT SEZ for Rs 1,400 crore following the completion and leasing.

Ascendas-Singbridge has been recently acquired by CapitaLand in June 2019 in a Singapore $11 billion deal and with the acquisition the merged entity is now one of Asia's largest diversified real estate groups with over S$123 billion of assets under management.

“For the full year 2018-19, 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 Rs 1,500 crore for the full year 2018-19, we realised over Rs 3,000 crore on a loan book of around Rs 7,000 crore,” Grewal said.

Over the past 10 months following the IL&FS issue, Altico has realised nearly Rs 2,500 crore of which Rs 1,300 crore were prepayments. While the market for refinancing has been slow because of the NBFC liquidity crisis, such prepayments came through multiple sources such as project cash flows, property sales by borrowers, asset sell-downs and refinancing from several newer yield hunting Foreign Portfolio Investors (FPIs), he said.

Altico has received these prepayments from multiple loans spread across various Tier-I cities, including Casa Grande in Chennai, Marvel in Pune, Skylark in Bangalore, Signature Global and Ramprastha in NCR, Manjeera in Hyderabad across project types including residential, commercial and affordable housing. All these exits have been made with returns ranging in the mid to high teens. Altico has reported net profit of Rs 75 crore on the back of revenues worth Rs 306 crore for the quarter ended June.

“We will use any surplus liquidity generated to deploy in our Board approved diversification strategy moving away from lending to only residential RE segment. Nearly 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,” Grewal said.

Altico plans to lend further to infrastructure sectors including education, hospitality, healthcare etc., along with diversification into retail mortgage lending.