ASK Group raises Rs. 500 crore in 15 months for residential projects.

Diversified financial services firm the ASK Group has raised Rs. 500 crore in structured debt over the last 15 months for investment into five residential projects in four cities. This has taken the fund corpus currently managed by the ASK Group to Rs. 2,150 crore.

The structured debt of Rs. 500 crore was raised from family offices and Ultra High net-worth individual partners against each identified project with ticket sizes ranging from Rs. 30 crore to Rs. 150 crore.

These funds were deployed into five residential projects of 5 to10 lakh sq ft located in four cities - Pune, Bangalore, NCR, Hyderabad. The typical term of these funds is about 24 to 30 months at a coupon rate of 18 to 20 per cent.

According to CEO and MD of ASK Investment Holdings, Sunil Rohokale, this structured debt instrument is similar to non-convertible debentures (NCDs) but investors are fully secured in terms of land and the cash flow of the project and to the tune of the corporate and personal guarantees supported by the post-dated cheques of the developer.

'We adopted this mode of fund raising as over the last 12 to 18 months time, people were hiding behind the structured debt. They were not very confident about the revival of the market and hence wanted to get into an instrument which can give them a 18-20 per cent assured return,' he added.

Instead of a typical fund structure where you first raise money and then deploy, the company raised this money against identified projects.

In the next six months, the company’s focus would be investing in new projects in Chennai, Bangalore and Pune. Rohokale underlined the group’s philosophy as following a simple predictable model of investing into five top cities, pure residential, mid-segment, middle of the city and earning returns upwards of 25 per cent.

The group had recently announced the first closure of $50 million (Rs. 300 crore) of its $200 million offshore fund in January. Earlier it had raised Rs. 350 crore in its first fund followed by their second fund of Rs. 1,000 crore.



HBL