₹200 Crore Deal: Address Maker Secures Private Funding for Land, Expansion & New Markets!

Address Maker Secures ₹200 Crore Private Credit Facility

Bengaluru-based real estate developer Address Maker has finalized a substantial ₹200 crore private credit deal with AI Growth Pvt. Ltd (AIGPL). This strategic funding is earmarked to bolster the company's expansion efforts, including land acquisition, facilitating joint development agreements, and financing ongoing projects, as announced by top executives from both firms.

Deal Structure and Purpose

AI Growth Pvt. Ltd, through its affiliated entities, will offer a rolling capital framework designed to provide flexible financial support to Address Maker. This arrangement is crucial for the developer's plans, enabling agile decision-making for land aggregation, and capitalizing on joint development opportunities. The committed capital ensures Address Maker can enhance its project pipeline and pursue growth strategies effectively.

Address Maker's Growth Ambitions

Khushru Jijina, chairman of Address Maker, highlighted the deal's significance, stating it provides the "financial agility to accelerate our next phase of growth in Bengaluru." The company also revealed plans to expand into new markets, with Mumbai being a key target. Address Maker has a proven track record, having delivered approximately 6.7 million sq. ft of various property types in Bengaluru, with an additional 5.2 million sq. ft under development. The company is also exploring redevelopment projects in Mumbai.

The Rise of Private Credit in India

India's real estate private credit market is experiencing dynamic growth, ranking second in Asia-Pacific and accounting for 36% of regional fundraising from 2020 to 2024, according to a Knight Frank report. Factors like regulatory reforms, diversified funding structures, and sustained demand for flexible financing are driving this trend. Projections suggest India could contribute 20-25% of the region's private credit growth by 2028. Vineet Agrawal, co-founder of AIGPL, expressed optimism about extending structured capital solutions to quality partners like Address Maker. The expansion of private credit in India is driven by developers increasingly relying on non-bank capital due to a tighter lending environment. Structured debt, last-mile funding, and special situation funds are becoming increasingly vital components of developer financing.

Impact

• This deal provides Address Maker with crucial capital to execute its growth strategies, potentially leading to increased project delivery and market presence. It highlights the growing role of private credit in supporting real estate developers in India, offering an alternative to traditional banking finance.
• The transaction reflects the increasing maturity and attractiveness of India's private credit market for both investors and borrowers.
• Impact Rating: 7/10

Difficult Terms Explained

• Private Credit: Loans provided by non-bank financial institutions or private funds to companies, often outside of public markets.
• Rolling Capital Framework: A flexible funding arrangement where capital is made available on a revolving basis, allowing a company to draw down and repay funds as needed.
• Joint Development Agreement (JDA): An agreement between a landowner and a developer where the developer constructs a project on the land, and both parties share in the profits or the constructed area.
• Non-Banking Financial Company (NBFC): A financial institution that provides banking-like services but does not hold a full banking license.
• Jiraaf: An online platform registered with the Securities and Exchange Board of India (SEBI) that offers investment opportunities in debt instruments like bonds.