Nisus Finance Services Co. Ltd. · BSE:NISUS
Nisus Finance Services — Real Estate Credit Opportunities Fund - 1 (RECOF-1) — Investor Presentation
52 slides from Nisus Finance Services's investor presentation
Slide 1: Real Estate Credit Opportunities Fund - 1 (RECOF-1)
REAL ESTATE CREDIT OPPORTUNITIES FUND - 1 ( RECOF - 1 ) Managed by Dalmia Nisus Finance Investment Managers LLP
Slide 2: Disclaimer
DISCLAIMER This pitch book is in relation to an offer to invest in real estate credit opportunities fund (“Fund”). It does not purport to be a complete description of the fund. In case there is a discrepancy between this presentation and the private placement memorandum (“PPM”), the PPM will prevail
Slide 3: Index
INDEX Real Estate Credit Opportunities Fund-1 (RECOF-1) Investment Process 4 • Executive Summary 28 • Investment Guidelines • Stake Holders • Security Collaterals • Investment Process Sector Overview • Post Investment Process 8 • Why Real Estate ? • Exits • What is Driving the Growth ? • Past & Curr
Slide 4: Real Estate Credit Opportunities Fund (RECOF 1)
REAL ESTATE CREDIT OPPORTUNITIES FUND – 1 (RECOF 1) 4
Slide 5: Real Estate Credit Opportunities Fund - 1 (RECOF 1)
REAL ESTATE CREDIT OPPORTUNITIES FUND – 1 (RECOF 1) SEBI Registered Category II Indian Real Estate Focused Alternative Investment Fund (AIF) Stage- Brownfield Project Type - Residential (Advanced Stage Projects) Underlying Instrument - Senior Investment Manager (IM) Secured NCD Dalmia Nisus Finance
Slide 6: Executive Summary
EXECUTIVE SUMMARY Target Corpus INR 500 Cr. (Including INR 200 Cr. Green Shoe option) Term 4 (four) years from the date of Final Closing (extendable by 2years) Minimum Investment INR 1 Cr. or any minimum amount as provided under the Regulations First Closing 12 (twelve) months from the date of regis
Slide 7: Stake Holders
STAKE HOLDERS • Investment Manager • Anchor Investor • Anchor Investor • Sponsor • IM Partner • IM Partner • Sponsor • Sponsor • Valuer • Risk Advisor • Tax Advisor • Trustee • Fund Accountant/ • Legal Advisor • RE Consultant • Internal Auditor • PMC Registrar/Transfer Agent REAL ESTATE CREDIT OPPOR
Slide 8: Sector Overview
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Slide 9: Why Real Estate?
WHY REAL ESTATE ? REAL ESTATE GROWTH OUTLOOK • Real estate contributed 6 percent to the Indian gross domestic product (GDP) in 2017 • The sector is estimated to grow to USD650 billion by 2025 and surpass USD850 billion by 2028 at 19.5% CAGR from 2017 to 2028 • Huge demand for housing: shortage of 10
Slide 10: What Is Driving the Growth?
WHAT IS DRIVING THE GROWTH ? RAPID URBANIZATION • Urban population (% of total) in India was reported at 33.53 % in 2017 • The urban housing shortage in India is estimated at around 10 million units • Progressive urbanization, growing along with urban population, which rose from 109 million in 1971
Slide 11: Reforms Reshaping the Indian Real Estate Sector
REFORMS RESHAPING THE INDIAN REAL ESTATE SECTOR REAL ESTATE ACT, 2016 (RERA) • RERA is making real estate sector more organized, structured, streamlined, accountable and fast-tracked with enhanced transparency • Protection of consumer interest, thus regaining confidence and trust of buyers for buyin
Slide 12: Target Market Story
TARGET MARKET STORY • Increased inventory offtake • Increase in new project launches • Outstanding demand of over 10 million housing units in urban National Capital locations Region INDIA To continue leading OECD economies in terms of real estate investments Pune Year 2018 No. of Change Mumbai housi
Slide 13: City-wise Housing Market Data
MUMBAI METROPOLITAN AREA HYDERABAD Most populous urban region Sixth most populous agglomeration Year 2018 No. of Change Year 2018 No. of Change housing units (Year on Year) housing units (Year on Year) Launches 74,363 220% Launches 5,404 54% Sales 63,893 3% Sales 15,591 9% Unsold Inventory 126434 9%
Slide 14: Why Invest in a Fund?
WHY INVEST IN A FUND ? 14
Slide 15: Why Fund?
WHY FUND? REAL ESTATE INVESTMENTS DIRECT INVESTMENT INDIRECT INVESTMENT THROUGH FUND DIVERSIFICATION Asset No Yes Geographic No Yes Developer No Yes NEGOTIATION ON Coupon Rate No Yes Due Diligence Cost No Yes Overhead Costs No Yes MONITORING Active Asset Management and Control No Yes Investment Upda
Slide 16: RECOF-1: Better Returns at Lower Risk
RECOF-1 : BETTER RETURNS AT LOWER RISK DIRECT INVESTMENT RETURNS FROM DIRECT INVESTMENT • Buying and holding physical real estate assets • Minimal price increase expected in next 2-3 years • Chosen due to lack of credible alternative options • Price rise does not justify the high costs (GST, stamp d
Slide 17: News Articles
Te tee emmy COE naniaaad Nifco to deploy 2140-150 crore ET Bice sen tom commas McoMCY MONON GOMER aca. << jin four real estate Nisus, Finance invests %25 cr in Mumbai- based realty developer 09,2017 3/25/2019 Nisus Finance invests in affordable Our Bureau | Mumbai | Updated on Januar HE Ecoyomic Tie
Slide 18: RECOF-1: Solution to Unique Alpha Creation in Late Stage Projects
RECOF-1 : SOLUTION TO UNIQUEα CREATION IN LATE STAGE PROJECTS 18
Slide 19: Why RECOF-1?
WHY RECOF-1? IM’S PERSONAL IM’S FORMIDABLE SKIN IN THE GAME DOCUMENTATION & STRUCTURING • DGH & NiFCO already manage ~INR 1,500 Cr. of real • Proven credentials of structuring, security creation and estate investments documentation to gain favorable judgments & quick resolution. Extensive risk prote
Slide 20: RECOF-1: Favorable Trends
RECOF-1 : FAVORABLE TRENDS • Housing inventory sales up by 6% • Effect of RERA, IBC, GST & demonetization visible. Real Estate has evolved as a more transparent, accountable and governed • Rapid liquidation of unsold stock. Residential inventory is at 3 sector years low • Consolidation in favor of p
Slide 21: RECOF-1: Capitalize on Opportunities
RECOF-1 : CAPITALIZE ON OPPORTUNITIES INR INR INR 1,40,000 Cr 30,000 Cr 500 Cr Annual wholesale Annual Demand for brownfield Fund RECOF-1 credit demand in real estate (RE) residential projects financing Corpus INR INR 5,60,000 Cr 1,20,000 Cr 0.42 % Wholesale credit demand in RE Demand for brownfield
Slide 22: RECOF-1: Overcoming Challenges
RECOF-1 : OVERCOMING CHALLENGES RECOF-1 • Focus on mid-income & affordable projects in key metro locations of MMR, Pune, Bengaluru, NCR, Chennai, Hyderabad which have witnessed high demand. • Partner with strong enterprises with high potential. Ability to generate high yield in such partnerships lay
Slide 23: RECOF-1: Benefits of Late Stage Projects
RECOF-1 : BENEFITS OF LATE STAGE PROJECTS PROJECT COST RISK LIQUIDITY RISK INITIAL LATE STAGE Project Cost Risk Liquidity Risk INITIAL LATE STAGE Project Age Project Age VIABILITY RISK APPROVAL RISK INITIAL LATE STAGE INITIAL LATE STAGE Approval Risk Viability Risk Project Age Project Age CAPITALIZI
Slide 24: Fund Structure
FUND STRUCTURE 24
Slide 25: Investment Structure
INVESTMENT STRUCTURE DOMESTIC INVESTORS (HNIs, CORPORATE, BANKS, OTHERS), FOREIGN INVESTORS Contributions Distributions (Class A1 Units, Class A2 Units) Sponsor/Anchor (Class E Units) Investor Nisus Finance Services Team Co Pvt. Ltd. (NiFCO) (Class B Units / Class C Units) Investment Dalmia Nisus Fi
Slide 26: Contribution and Fee Structure
CONTRIBUTION AND FEE STRUCTURE CLASS HOLDERS % OF CAPITAL CAPITAL COMMITMENT* Class A1 Contributors, making a capital commitment >INR 1 Cr. <INR 10 Cr. 85% INR 425 Cr. Class A2 Contributors, making a capital commitment >= INR 10 Cr. Class B Investment Manager / Sponsors INR 5 Cr. Class C Anchor Inve
Slide 27: Product Composition
PRODUCT COMPOSITION* RECOF-1 SENIOR SECURED DEBT: NCD/ COVERED BONDS • Target Markets: Mumbai Metropolitan Region, National Capital Region, Bengaluru, Pune, Chennai, Hyderabad • Developers with established track record in key micro markets • Focus only on projects where: - All relevant construction
Slide 28: Investment Process
INVESTMENT PROCESS 28
Slide 29: Investment Guidelines and Security Collaterals
INVESTMENT GUIDELINES* • The Fund shall not invest more than 25% (twenty-five percent) of its investible funds in one portfolio entity • The Fund shall not make investments exceeding 30% (thirty percent) of the aggregate Capital Commitments of the Fund in one group • The Fund shall not make investme
Slide 30: Investment Process
INVESTMENT PROCESS Transaction Analyst CIO Head of CRO / Legal Team (Origination) Terms • Financial analysis • Creation of Head of Terms • Approved Head • Deal sourcing • Market research of Terms • Confirmation of fund availability from Treasury IC Internal DD Borrowing Approved Pre - IC Company (BC
Slide 31: Post Investment Process
POST INVESTMENT PROCESS ONGOING PROCESS • Perfection of collateral & tracking conditions Subsequent • Compliance with statutory & transaction related requirements • Operation/Management of escrow accounts as per the definitive agreements and RERA guidelines • Management of investment instruments • P
Slide 32: Exits
EXITS NATURAL EXITS ENFORCEMENT (IN CASE OF FINANCIAL EVENT OF DEFAULT) Through completion of project lifecycle with positive cash flows. • Under section of Insolvency and Bankruptcy Code, 2016 as a financial creditor • Proceedings u /s 138 of the Negotiable Instruments Act, 1881 • Interim relief u/
Slide 33: Conflicts of Interest
CONFLICTS OF INTEREST FUND INVESTMENT PROVIDING AN EXIT TO INVESTMENT MANAGER PARTNERS OR AFFILIATES: Independent members of Advisory Board to mandatorily approve investments which provide exits to investments held for more than one year by any of the Investment Manager Partners or Affiliates. FUND
Slide 34: RECOF-1: Risk Management Framework
RECOF-1 : RISK MANAGEMENT FRAMEWORK MARKET RISK : SLOWDOWN IN SALES • Detailed micro market analysis by third party experts, mid income housing stock, fast sales potential, underwriting of balance sales at 15%-20% discount to market, high receivables from sold inventory • Deal structured for financi
Slide 35: RECOF-1: Risk Management Framework
RECOF-1 : RISK MANAGEMENT FRAMEWORK EXECUTION & APPROVAL RISK : DELAY IN COMPLETION • Financing fully approved brownfield projects with low dependency on regulatory environment • Direct payments to vendors against delivery of products and services. Active PMC and periodic audits • Reputed contractor
Slide 36: Past and Current Transactions (IM Partner)
PAST AND CURRENT TRANSACTIONS (IM PARTNER) DEAL 1 DEAL 2 DEAL 3 Location Bengaluru MMR MMR Promoters equity (In Rs Cr) 10 5 8 Investment size (In Rs Cr) 35 20 20 Approval status All approvals in place All approvals in All approvals in place expect final CC place expect final CC Stage of completion a
Slide 37: Pipeline Transactions for the Fund
PIPELINE TRANSACTIONS FOR THE FUND DEAL 1 DEAL 2 Location Bengaluru NCR Stage of transaction Partially disbursed & warehoused Diligence in progress Promoters equity (In Rs Cr) 26 45 Investment size (In Rs Cr) 65 65 Approval status All approvals in place All approvals in place Current stage of comple
Slide 38: Sponsors & Anchor Investors
SPONSORS & ANCHOR INVESTORS 38
Slide 39: Sponsors & Anchor Investors
SPONSORS & ANCHOR INVESTORS NISUS FINANCE SERVICES CO PVT LTD (NiFCO) SPONSOR, ANCHOR INVESTOR AND IM PARTNER • NiFCO offers a full suite of Asset Management and Investment Advisory services for real estate in India. It is a sponsor to Real Estate Asset Performance Fund-1 (REAP) • NiFCO group includ
Slide 40: Investment Manager
INVESTMENT MANAGER 40
Slide 41: About Us
ABOUT US DALMIA NISUS FINANCE INVESTMENT MANAGERS LLP (DNFIM) NISUS FINANCE SERVICES CO PVT. LTD (NiFCO) DALMIA GROUP HOLDINGS (DGH) • 80+Man Years of team experience in real estate. Specialist in • 150+ Man Years of team experience. Extensive domestic RE AMC and global reach. Founded several succes
Slide 42: Proven Performance Track Record: NiFCO
PROVEN PERFORMANCE TRACK RECORD Nisus Finance Services Co Pvt. Ltd. (NiFCO) AUM Growth (INR CR) Region wise Allocation 450 • Nisus Finance Services Co Pvt. Ltd. (NiFCO) is a specialist in real estate services & asset management Western Southern 21.44% Northen • Headed By Mr. Amit Goenka Southern - M
Slide 43: Proven Performance Track Record: DGH
PROVEN PERFORMANCE TRACK RECORD Dalmia Group Holdings (DGH) RE Debt AUM Growth (INR CR) Region wise Allocation (Debt + Equity) • 75 + years old conglomerate 534 • Chaired by Mr. Gaurav Dalmia Southern 4.00% Western 407 Northen • 16+ years of real estate (RE) investments across 333 Eastern 15 cities
Slide 44: Team
TEAM 44
Slide 45: Team Composition
TEAM COMPOSITION Advisory Board Investment Committee Risk & Compliance Team Third Party • Consists of 4 members • Consists of 6 members • Consists of 2 members Consultants • Reviewing compliance and • Approving of fund • Responsible for independent governance in deal origination, investments and div
Slide 46: Organization Structure
ORGANIZATION STRUCTURE Investment Advisory Trustee Board (AB) Committee (IC) Managing Director / Chief Chief Compliance Executive Officer (MD/CEO) Officer (CCO) Chief Operating Chief Investing Chief Risk Officer (COO) Officer (CIO) Officer (CRO) Treasury Head AMC Head Head Investor Credit Chief Lega
Slide 47: Advisory Board
ADVISORY BOARD GAURAV DALMIA (ADVISORY BOARD) • Chairman of Dalmia Group Holdings and Landmark Holdings, with over 40 investments in housing projects across India • Sponsor and Board member of True North, a $3.5 billion Indian private equity fund, focused on control transactions • Co-sponsor of Evol
Slide 48: Advisory Board
ADVISORY BOARD BHARAT ANAND ( INDEPENDENT ADVISORY BOARD MEMBER ) • Partner in Khaitan & Co • Practice in mergers and acquisitions, joint ventures, private equity transactions • Ranked by Chamber Asia Pacific as band 1 for M&A • Ranked amongst top 100 lawyers in India. Member of FICCI’s corporate la
Slide 49: Investment Committee
INVESTMENT COMMITTEE RAKESH AGGARWAL ( INVESTMENT COMMITTEE MEMBER & CCO OF IM ) • CEO of Dalmia real estate group. 35 years of corporate experience across real estate, FMCG, financial services and investments • 12 years with the Dalmia Group • Large acquisitions for offshore third party funds as we
Slide 50: Investment Committee
INVESTMENT COMMITTEE INDER PREET SINGH ( INVESTMENT COMMITTEE MEMBER & COO OF IM ) • Over 11 years of experience in real estate with renowned real estate companies like DLF Limited, Unitech and Dalmia group. • Cross functional experience in corporate strategy, finance, business planning, project bud
Slide 51: Notes
NOTES REAL ESTATE CREDIT OPPORTUNITIES FUND - 1 (RECOF -1) Managed By- Dalmia Nisus Finance Investment Managers LLP 51
Slide 52: Contact Us
CONTACT US MUMBAI OFFICE DELHI OFFICE 201 D, Poonam Chambers, A – Wing, 11th Floor, Narain Manzil, 23, Dr. Annie Besant Road, Worli, Mumbai – 400 018 Barakhamba Road, New Delhi - 110 001 Contact No. +91 22 6164 8888 Contact No. +91 11 4362 1200 Email: investor.relations@nisusfin.com | Website: www.n
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