Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
Indiabulls Housing Finance has partnered with Oaktree Capital to buy a significant portion of loans provided by the non-banking finance company to fund various developers. The two companies will subscribe to debentures issued by a jointly formed special purpose vehicle (SPV) that will raise funds through debt capital.
Oaktree Capital will invest ?73,000 crore, while Indiabulls Housing Finance will invest ?2,000 crore, and the SPV will acquire the loans, providing immediate liquidity to the NBFC. The developers are expected to repay the loans over time based on the project's completion and sales cycle, while the SPV will pay back the debentures when the recovery takes place.
According to sources, the SPV has already been created, and the fund infusion is expected to occur over the next few weeks. The joint venture will enable Indiabulls Housing Finance to exit these loans, while Oaktree Capital will acquire these loans without any changes to the underlying terms.
Indiabulls Housing Finance's loan book is currently valued at around ?274,000 crore, and this deal with Oaktree Capital could be seen as a model for future transactions, as another ?2,700 crore deal is already in the works. In June 2020, Indiabulls Housing Finance raised over ?72,000 crore from Oaktree Capital by pledging some of its loans extended to realty developers. Oaktree Capital acquired non-convertible debentures guaranteed by an underlying real estate portfolio valued at nearly $4,500 crore.
In recent years, finance firms have made more complex deals by setting up alternative investment funds with foreign investors, where the latter had the first claim on recovery. However, such senior-junior deals have now stopped after banks and realty funds drew the attention of the capital market regulator.
In recent years, the Indian real estate market has faced numerous challenges, including liquidity issues, regulatory changes, and the COVID-19 pandemic's impact on the economy. Many real estate developers have struggled to repay their loans, causing NBFCs to look for alternative solutions, such as partnerships with foreign investors, to obtain liquidity. Oaktree Capital's partnership with Indiabulls Housing Finance is a testament to the market's growing interest in such partnerships.
In addition, Oaktree Capital is no stranger to partnering with Indian companies. In 2019, the company acquired a majority stake in DHFL's loan portfolio in partnership with Piramal Capital and Housing Finance. In 2020, it also acquired a controlling stake in Srei Equipment Finance. Oaktree's partnership with Indiabulls Housing Finance demonstrates the company's continued interest in investing in the Indian market and the NBFC sector.
Indiabulls Housing Finance's partnership with Oaktree Capital will enable the company to exit some of its loans while providing immediate liquidity. This partnership is an indication of the growing interest in alternative solutions for liquidity issues in the Indian real estate market, and it is expected to set a precedent for future transactions.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
We use cookies to give you the best possible service while using our website, please click accept and carry on browsing if you're happy with this. For more information see our Privacy Policy.
Okay, Got it!This disclaimer ("Disclaimer") is applicable to the entire Site. Upon entering the Site it is recommended that you immediately read the Terms and Conditions and Privacy Policy listed therein. Your continued usage of this Site will indicate your unconditional acceptance of the said Terms and Conditions and Privacy Policy. You hereby agree that Propscience reserves the right to modify at any time, the Terms and Conditions and Privacy Policy governing this Site without prior notification. Your usage of the Site implies that you will be bound by any such modification. You agree and acknowledge that it is your responsibility to periodically visit the Site and stay updated with the Terms and Conditions and Privacy Policy of the Website.
The information contained in this Site has been provided by Propscience for information purposes only. This information does not constitute legal, professional or commercial advice. Communication, content and material within the Site may include photographs and conceptual representations of projects under development. All computer-generated images shown on the Site are only indicative of actual designs and are sourced from third party sites.
The information on this Site may contain certain technical inaccuracies and typographical errors. Any errors or omissions brought to the attention of Propscience will be corrected as soon as possible. The content of this Site is being constantly modified to meet the terms, stipulations and recommendations of the Real Estate Regulation Act, 2016 ("RERA") and rules made thereunder and may vary from the content available as of date. All content may be updated from time to time and may at times be out of date. Propscience accepts no responsibility for keeping the information in this website up to date or any liability whatsoever for any failure to do so.
While every care has been taken to ensure that the content is useful, reliable and accurate, all content and information on the Site is provided on an "as is" and "as available" basis. Propscience does not accept any responsibility or liability with regard to the content, accuracy, legality and reliability of the information provided herein, or, for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information. No information given under this Site creates a warranty or expands the scope of any warranty that cannot be disclaimed under applicable law.
This Site provides links to other websites owned by third parties. Any reference or mention to third party websites, projects or services is for purely informational purposes only. This information does not constitute either an endorsement or a recommendation. Propscience accepts no responsibility for the content, reliability and information provided on these third-party websites. Propscience will not be held liable for any personal information of data collected by these third parties or for any virus or destructive properties that may be present on these third-party sites.
Your use of the Site is solely at your own risk. You agree and acknowledge that you are solely responsible for any action you take based upon this content and that Propscience is not liable for the same. All details regarding a project/property provided on this Site are updated on the basis of information available from the respective developers/owners/promoters. All such information will not be construed as an advertisement. To find out more about a project / development, please register/contact us to visit the site you are interested in. All decisions taken by you in this regard will be taken independently and Propscience will not be liable for any such loss in connection with the same. This Site is for guidance only. Your use of this Site - including any suggestions set out in the Site and or any use of the resources available on this Site, do not create any professional - client relationship between you and Propscience. Propscience cannot accept you as a client until certain formalities and requirements are met.
We use cookies to give you the best possible service while using our website, please accept it and continue browsing if you're happy with this. For more information see our Privacy Policy