The Restack: Online Real Estate Investment Platform | Commercial Property & Debentures

Real Estate Credit Investment Opportunity - Bangalore

Primary

Electronic city, Bangalore

Credit Investing

Residential

Under Development

₹ 1000000

Minimum Investment

Coupon

14%

IRR

14.8%

Security Cover

1.75x

Issue Size

14 Crores

An alternative investment opportunity offering high fixed income returns. Start earning passive income by investing in High Yield Real Estate Debentures. The cashflows from the sale of plots by the developer will be used to service & redeem the debentures.

ISSUER

Leading Bangalore based real estate developer

Delivered 50 lac SF over 9 projects

Excellent track record with all major FIs

RESIDENTIAL PROJECT

'Phase 2 extension' of premium plotted residential Project

Advanced stage of approvals

Project includes modern amenities

STRATEGIC LOCATION

Prime location of Electronic City phase-I

Close to manufacturing and industrial office hubs of Jigani and Bommasandra

One of the few plotted developments in the densely populated area

INVESTMENT RATIONALE

High returns of 14.8% IRR

Fully secured investment through mortgage on plots

Plots valued at ~14% discount to market value

Investment Highlights

Investment Structure

Term sheet

Issuer	SPV of the Developer
Developer	Leading real estate firm based out of Bangalore
Issue Type	Senior secured debentures
Total Issue Size	14 Crores
Tenor	24 months
Use of proceeds	Project development and General Corporate Purpose
Principal moratorium	12 months
Repayment	4 equal quarterly instalments post principal moratorium
Coupon (Rate of Interest)	14% per annum through regular quarterly payouts
IRR	14.8%
Project	Residential plotted project which is a phase 2 extension development of a larger fully built-out township comprising of lake-front villas and plots
Identified Inventory	Identified plots in the residential project phase 2 extension are being mortgaged
Security	Following security will be created in favour of the Security Trustee representing the interest of the debenture holders. This will be a CP to the disbursal,
	First and exclusive mortgage on Identified Inventory First and exclusive charge on cashflows from Identified Inventory through escrow and hypothecation Corporate guarantees & Post-dated cheques
Security Cover	1.75x total security cover Conservative underwriting with plots valued at ~14% discount to market value

Issuer

Established in 2012, Developer is a professionally run Real Estate firm based out of Bangalore
Over the last decade, they have delivered over 50 lac SF across Residential Apartments, Villas and Plotted developments across Bangalore city
7 projects over 20 lac SF is under development & upcoming projects pipeline of over 60 lac SF
Excellent track record of completing numerous Grade A residential plotted developments

Project

Premium plotted residential project; Phase 2 extension being a part of a larger township comprising of fully built and sold lake-front villas and plots with a total land area of 40 acres
The total saleable area of the residential plotted project is 63,227 SF on a total land area of 2.75 acres
Located in the heart of Electronic city (E-City); E-City has a total office stock of 95 lac SF housing companies like Infosys, Wipro, Tech Mahindra and many more
Project has easy access to the industrial hub of Jigani and Bommasandra which has numerous companies like Biocon, Titan Industries Limited, HCL Technologies Limited, Cipla Limited,Mahindra Electric, etc

Location

Micromarket

Choose your investment structure

Principal Investment

1000000

Hold Period in Years

Returns

₹ 0

Investment Multiple

IRR

Account Value Graph

Value is the sum of cumulative gross coupon and cumulative principal paid back for a Principal Investment of INR 10 Lacs.

Cumulative Gross Coupon

Cumulative Principal paidback (redemption)

Investor cash flows

The below cash flows are representative of Principal Investment of INR 10 Lacs with a hold period of 2 years assuming a disbursal happening on 01-Feb-2023

INVESTOR CASH FLOW	Apr 2023	Jul 2023	Oct 2023	Jan 2024	Apr 2024	Jul 2024	Oct 2024	Jan 2025
Coupon (Interest)	35000	35000	35000	35000	35000	26250	17500	8750
Debenture redemption	0	0	0	0	250000	250000	250000	250000
Distributions	35000	35000	35000	35000	285000	276250	267500	258750

Note

*The above Coupon (Interest) is subject to TDS

Lock-in period of 1 year within which resale is not permitted

Risk Matrix

Market Risk	Detailed analysis done on the real estate market, city and micro-market trends at the time of underwriting
Approval Risk	Project is in advance stage of approvals. Receipt of development approvals & RERA application filing will be a condition precedent to the disbursal.
Development Risk	Developed by reputed real estate developer with significant track record in the industry Low development risk as residential plotted project requires lower capital expenditure
Title Risk	Due diligence carried out by one of the leading independent third-party law firms
Cash Flow Risk	Plotted residential project has low Capital Expenditure Coupled with short collection cycles for sales of plots there is a likelihood of accelerated repayment leading to early redemption of debentures
Liquidity Risk	Self liquidating investment as the cashflow from sale of plots will service and redeem the debentures
Default Risk	Although the debentures are unrated and unlisted, the debt is fully secured through a first and exclusive mortgage on identified plots, hypothecation and escrow Cash security cover of 1.75x on Total Investment; Plots valued conservatively at ~14% discount to market value Additionally, corporate guarantees will be provided.

Disclaimers

THIS PRESENTATION IS INTENDED ONLY FOR THE PERSON TO WHOM THE PRESENTATION IS MADE OR DELIVERED AND IS NOT FOR FURTHER CIRCULATION. THE CONTENT OF THIS PRESENTATION IS CONFIDENTIAL. THE INFORMATION IN RESPECT OF EVERY INVESTMENT OPPORTUNITY IS PROVIDED TO YOU SOLELY FOR YOUR INFORMATION AND UNDER NO CIRCUMSTANCES SHOULD THE INFORMATION BE USED OR CONSIDERED OR DEEMED AS AN OFFER TO SELL OR THE INVITATION OR SOLICITATION OF AN OFFER TO BUY ANY PRODUCT OR SERVICE OFFERED BY US. NO SUCH OFFER OR INVITATION OR SOLICITATION WILL BE MADE PRIOR TO THE DELIVERY OF DEFINITIVE DOCUMENTATION RELATING TO THE SECURITIES BEING OFFERED. ITS USE FOR ANY OTHER PURPOSE IS NOT AUTHORIZED. ANY REPRODUCTION IN WHOLE OR IN PART, OR THE DISCLOSURE OF ITS CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF REALTYSTACK PVT LTD (‘RESTACK’, ‘COMPANY’), IS PROHIBITED. THE CONTENTS OF THE PRESENTATION ARE PROVISIONAL AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE AND THE INFORMATION CONTAINED HEREIN IS NOT EXHAUSTIVE. THE COMPANY DOES NOT GIVE ANY INVESTMENT ADVICE OR RECOMMENDATION IN RESPECT OF THE OPPORTUNITIES MENTIONED IN THIS PRESENTATION AND ACCORDINGLY, NOTHING IN THIS PRESENTATION SHOULD BE CONSIDERED AS AN INVESTMENT ADVICE OR RECOMMENDATION

RESTACK IS ONLY AN ONLINE REAL ESTATE INVESTMENT PLATFORM TO SHOWCASE OPPORTUNITIES TO REGISTERED USERS AND IS NOT LIABLE TO ANY RISKS OR LOSSES OR FOR NOT REALIZING EXPECTED RETURNS OR PERFORMANCE FROM THESE INVESTMENTS WHICH COULD BE DUE TO MULTIPLE EXTERNAL FACTORS

THE INFORMATION IN THIS PRESENTATION HAS NOT BEEN INDEPENDENTLY VERIFIED. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE AS TO THE FAIRNESS, ACCURACY OR COMPLETENESS OF THE PRESENTATION AND THE INFORMATION CONTAINED HEREIN AND NO RELIANCE SHOULD BE PLACED ON IT. INFORMATION HEREIN HAS BEEN EXTRACTED FROM VARIOUS SOURCES AND THE COMPANY DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. ALL PROJECTIONS AND VALUATIONS ARE PROVIDED FOR INFORMATION PURPOSES ONLY. THEY MAY BE BASED ON SUBJECTIVE ASSESSMENTS AND ASSUMPTIONS AND MAY PRODUCE DIFFERENT RESULTS ON A CHANGE IN METHODOLOGY. WHILE CONSIDERING INFORMATION, PLEASE NOTE THAT HISTORICAL INFORMATION OR PROJECTED INFORMATION SHOULD NOT BE RELIED UPON AS AN ACCURATE PREDICTION OF FUTURE PERFORMANCE

RISK FACTORS :

PLEASE REFER THE INFORMATION MEMORANDUM, WHICH CAN BE SHARED UPON REGISTRATION, FOR DETAILED RISK ANALYSIS