Realty firm Arvind SmartSpaces Ltd (ASL) has raised around Rs 85 crore equity capital from HDFC Capital’s real estate fund and its promoters by issuing preferential shares.

ASL said in a statement that its board approved the allotment of 68.5 lakh equity shares, aggregating to about Rs 85 crore, to HDFC Capital Affordable Real Estate Fund-1 (H-CARE 1) and the promoters of ASL for Rs 124 per share.
Post allotment of shares, H-CARE 1 will have about a 9.5 per cent stake in the company.

“The equity raised in this round will give a strong impetus to this growth initiative and further strengthen the balance sheet,” ASL said.

ASL Chairman Sanjay Lalbhai: “We are extremely happy to have HDFC Capital Advisors Limited as our strategic partner. This infusion of long term patient capital into the company will give us the flexibility to pursue strategic growth across all the segments that we operate in”.

The enhanced equity base and low leverage give the company significant headroom to raise further capital to pursue value accretive opportunities, he added.

Vipul Roongta, MD and CEO of HDFC Capital Advisors Ltd, said, “This investment is an extension to our existing partnership platform set up in 2019, with Arvind SmartSpaces”.

He said the funding meets its objective to provide long-term equity and mezzanine capital to marquee developers for the development of affordable and mid-income housing in India.

“Further, this is in line with HDFC Capital’s strategy of partnering with top-rated developers with a good track record of development and delivery.
“We believe that consolidation in the residential sector is a given and that developers with strong brand presence shall capture a disproportionate share of the market,” Roongta said.

Kamal Singal, MD and CEO of ASL, said the company feels that there is a huge opportunity in real estate development in India, especially in the post-pandemic era.

“Organised developers with long term and organised capital are in a unique position to deliver customer-centric products and solutions on a sustainable basis. This partnership will not only provide resources to pursue growth but also help in building the business further by leveraging the brands and legacy of trust that both the partners bring to the business,” Singal said.

ASL is one of India’s leading real estate developers with operations spread across 19 projects in four cities (Ahmedabad, Bangalore, Pune and Gandhinagar). The company operates across multiple verticals like residential, commercial, industrial, retail, plotted developments, clubhouses and golf courses.

HDFC Capital Advisors Ltd, a 100 per cent subsidiary of HDFC Ltd, provides investment management services for real estate private equity financing and is one of the largest fund managers in the country.

The company is the investment manager to HDFC Capital Affordable Real Estate Fund 1 (H-CARE 1) and HDFC Capital Affordable Real Estate Fund 2 (H-CARE 2), both Sebi registered Category II Alternative Investment Funds.

The primary investors in the H-CARE funds include a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and the National Investment and Infrastructure Fund (NIIF).

H-CARE 1 and H-CARE 2 combine to create a USD 1.1 billion platform targeting affordable and mid-income residential projects in India’s leading 20 cities.