Is leverage / mezzanine funding a double edged sword in project financing?

Name: Is leverage / mezzanine funding a double edged sword in project financing?
Start: 2019-02-27 00:00:00
End: 2019-02-27 00:00:00
Location: Grand Salon Part 1, Grand Hyatt, Kalina, Santacruz - East

February 27th, Mumbai

Grand Salon Part 1, Grand Hyatt, Kalina, Santacruz - East

Bandra Kurla Complex Vicinity, Off Western Express Highway, Santacruz East, Mumbai, Maharashtra 400055, India

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Priya Mathias GRI

Senior Vice President - Marketing

GRI Institute

[email protected]

+919619898682

Priya is leading the strategy, investors relationship, business development, key account management, content development, special projects, events and team management across B2B/B2C at the GRI club. Headquartered in London, the GRI Club is a 'membership by invitation' club reserved exclusively for a qualified individual (C/Director level decision-makers) in real estate globally. Priya is a part of the GRI Management team and leads the India real estate relationships (Investors, Lenders, Developers, and operators) she is also responsible for the group's Asia Pacific business expansion. She has over 20 years of Marketing and Communications experience across real estate, hospitality, media and retail industry.

Overview

The fine art of portfolio balance: What really drives the real estate landscape in India today?

GRI Club India members met over a breakfast hosted by GRI Club Partner PwC recently in Mumbai to debate the challenges faced by developers and financiers in the Indian residential sector. The high-spirited discussions centred on evolving business models, single asset vs multi-asset class investment strategies and whether the residential market is in need of a revival.

A summary of the discussion points:

Participants discussed how developers are now largely funded by debt which, from the financiers’ point of view, has resulted in an asset-liability mismatch.

Asset-liability mismatches, as was observed,is not a new phenomenon: in the late 1990s, resulted in a crisis amongst non-banking financial companies (NBFCs) and created liquidity challenges for other financiers holding investments in real estate assets.

The mitigating factor against the asset-liability mismatch today is that there is far more equity capital, although management quality remains an issue. The avenues for sourcing equity financing and recapitalising companies in order to manage risk capital, look much better.

In terms of M&A activity within the sector, it was noted that there has been a shift towards consolidation, the sale of portfolios and merger deals, although some M&A deals are being drawn out and taking time to complete.

A change in the market has been noticed, with an increase in risks that is affecting the level of equity funding required to acquire assets and the risks valuation metrics have also changed, with an expected decline in future multiples. Participants concluded that funding frameworks had shifted to a new paradigm and that going forward, it was necessary to understand exactly what was the ‘new normal’.

Key executives who are part of GRI community attended the meeting, on behalf of investment banks and funds, advisors, operators and developers, such as Anita Kataria (Raheja Universal), Hari Krishna V (CPPIB - India), Manoj Menda (RMZ Corp), Aditya Chandak (Chandak Group), Sanjay Hinduja (Shapoorji Pallonji Finance), Abdullah Rashed Jasem Al Abdooli (Al Marjan Island), Pradeep Khanna (Reliance Nippon Life Asset Mgmt), and Kaushik Desai (Walton Street).

Timetable

Wednesday, February 27th

9:00 am to 10:00 am | Registrations and Breakfast Networking
10:00 am to 11:00 am | Discussions
11:00 am to 11:30 am | Coffee Networking

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GRI has no speakers, no presentations. Instead, you have a selection of closed-door discussions where everyone can participate.
Much like a conversation in your own living room, the dynamic environment allows you to engage with your peers in an informal and collegial setting.

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