Home builders switch to equity funding in RERA regime

Dated on: Thursday 8th June 2017

Property advisers and developers feel that the tough deadlines under the RERA have prompted builders to seek long-term equity partnerships, with PE firms to reduce risks, focus on execution and avoid refinancing loans mid-way through the project cycle, rather than settle for structured debt providers seeking short-term profits. They also agreed that equity capital has been coming in the form of platform-level deals, where PE funds and builders partner to invest in multiple projects. However, these transactions are restricted to only larger and branded developers.