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Credent Global Finance is looking to tap into the growth potential of second-tier cities in India through the launch of its new real estate fund, Credent Estate Multiplier Fund. The company is leveraging its private equity capability and operational infrastructure to invest in mid-income residential projects through equity and is looking to capitalize on the growth potential of second-tier cities, which are quickly catching up with that of first-tier cities in terms of real estate activity.
Credent Global Finance (CGF), a company listed on the Bombay Stock Exchange and registered with the Securities and Exchange Board of India, is in discussions to raise $500 million under the Alternative Investment Fund (AIF) to finance mid-segment real estate projects in second-tier cities in India. The company is hoping to tap into the growth potential of these cities, which are seen as the next growth engine in the country.
The company's Board of Director, Vishnu Rathore, stated that the investment ticket size will be between INR 30-50 crore ($4.1-$6.8 million). The company is looking at cities such as Indore, Chandigarh, Lucknow, and Baroda, which have emerged as top five second-tier cities in growth of the residential property market due to rapid urbanization, industrialization, and growth of the IT industry.
Investment in real estate in India saw a growth of 32% YoY to reach an all-time high of $7.8 billion in 2022, according to CBRE. This is a testament to the growth potential of the real estate market in India, and second-tier cities are expected to play a significant role in this growth. The real estate activity in second-tier cities is quickly catching up with that of first-tier cities, and CGF is looking to capitalize on this potential.
Credent recently acquired the Essel Finance Private Equity business in an all-cash deal, and the company is leveraging this private equity capability, operational infrastructure, and ecosystem to launch the new real estate fund, Credent Estate Multiplier Fund. This fund will invest in mid-income residential projects through equity, and will be divided into two AIFs, one focused on second-tier cities and the other on independent housing.
The real estate market in second-tier cities has seen a remarkable jump in both absorption as well as supply of quality residential properties in various price brackets, according to a recent report. The report highlights that there has been strong growth in the residential real estate sector in various second-tier cities from FY 2017-18 to FY 2021-22.
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