Century Real Estate raises Rs 40 cr from Reliance Capital

BANGALORE: Bangalore-based builder Century Real Estate has raised Rs 40 crore from Reliance Capital and will raise another Rs 160 crore from the Anil Ambani promoted firm for its upcoming residential projects. “The deal was closed last week and will be a structured transaction, which includes private placement of non-convertible debentures (NCD) and equity component,” sources said.

“The company will soon start due diligence for other assets too.” NCDs are unsecured bonds, which cannot be converted to company equity or stock, and usually have higher interest rates. This instrument, which offers yields of 14-18 %, has emerged as this year’s tool-of choice for real estate firms to raise money. Both Reliance Capital and Century Real Estate declined to comment on the transaction. Century will use the funds to develop the second phase of the upcoming 500-unit residential project in Rajarajeshwari Nagar in Bangalore .

Century Indus is expected to be completed by the end of 2014. As per Venture Intelligence , the ratio of PE to real estate investment for the quarter ended June 2012 was less than half. PE firms invested $162 million across six deals in the June quarter as compared with $553 million across 14 transactions with disclosed values in the yearago period.

Some of the big deals concluded during the quarter include Morgan Stanley Real Estate Investment (Rs 500 crore with Supertech) for a township project in Noida; Walton Street Capital (Rs 100 crore with Supertech) for a residential tower at Noida and the Government of Singapore Investment Corporation (Rs 125 crore with Brigade Group) to buy land in Bangalore.