Goldman Sachs invests $150m in Piramal Realty

The New York-headquartered investment bank is the second overseas investor to have acquired a stake in the Mumbai-based real estate developer in less than a month.  

The Wall Street investment bank Goldman Sachs has invested $150 million for a minority stake in Piramal Realty, the real estate development arm of the Mumbai-based business conglomerate Piramal Group.

Piramal Realty would use the capital to expand its real estate portfolio and acquire prime properties in and around Mumbai, according to a company statement announcing the deal.

Ankur Sahu, co-head of private equity at Goldman Sachs in Asia, said the investment is consistent with the firm’s ongoing strategy of partnering with India’s entrepreneurs to invest in sectors critical to the country’s development.

“The government’s focus on simplifying regulation and boosting economic growth will kick start investment and consumption. Under such a cyclical recovery, the demand for high-quality modern housing and office space from a trusted proven brand developer will serve to create a significant leader in Indian real estate,” he said.

“As one of the leading investors in global real estate, Goldman Sachs has helped develop some of the world’s finest buildings, such as 15 Central Park West in New York and 16 Colleyers Quay in Singapore. Their experience and expertise will further inspire us to build world-class developments in India and achieve the highest standards of design, technology, execution and customer service,” added Anand Piramal, executive director of the Piramal Group.

Following the investment, Piramal Realty is now planning to launch a buy-back guarantee called Piramal Assurance, through which the company would offer to buy back any residential real estate unit from a customer at a five percent discount to the market value until the possession of the property if the buyer is not satisfied.

On the rationale for the scheme Piramal said: “Our ‘Assurance’ will reduce the financial risk of purchase and provide peace of mind for customers, who will know that their investment is safe and liquid. This will also set high performance expectations for our team and compel us to keep our customers happy and at the centre of our business.”

Just last month, Piramal Realty announced a deal with Warburg Pincus. Pegged to be one of the largest foreign direct real estate investment in India to date, the New York-based private equity firm has invested $284 million for a minority stake in the developer.

Founded in 2011, Piramal Realty has over 10 million square feet of commercial and residential projects currently under development across Mumbai.