Apollo Global plans to acquire real estate loans from L&T Finance
Real Estate

Apollo Global plans to acquire real estate loans from L&T Finance

Apollo Global Management is in advanced talks with L&T Finance Holdings Ltd to buy real estate debts worth Rs 8,000-9,000 crore. The L&T Group is trying to shift its focus to the retail sector by reducing its infrastructure and real estate exposure.

The $1 billion deal will allow L&T to get cash up front rather than in instalments, allowing it to deleverage its balance sheet. Meanwhile, the private equity firm will get a portfolio of real estate assets with some first-loss protection and the opportunity to build a relationship with the engineering giant.

According to the media sources, the sale will be completed in a few weeks and would be carried out under a freshly formed alternative investment fund (AIF) structure, similar to Apollo's agreement with Piramal Capital & Housing Finance, which is part of Piramal Enterprises.

L&T Finance's real estate book decreased to Rs 11,210 crore in the fiscal year (FY) 2022 from Rs 12,945 crore the previous FY. The financial services branch is owned by L&T, which controls 66.26% of the company.

The debt on the L&T Finance real estate book would be refinanced using bonds or non-convertible debentures (NCDs) and moved to the AIF, which would be jointly held by Apollo Global and L&T Group. The average rupee return on these loans is 15-16%. Trilegal and Shardul Amarchand Mangaldas were the legal advisors.

An L&T Finance official told the media that L&T Finance has already embarked on the chosen strategy of becoming a retail finance company, and in that direction, they would be limiting their exposure to wholesale finance in general and real estate finance in particular.

By FY 2025-26, they plan to have retailised their loan book to the extent of over 80%, with predicted retail loan growth of nearly 25% CAGR because of fintech at scale, in which they have invested heavily in recent years.

Dinanath Dubhashi, L&T Finance managing director and chief executive, revealed that the company is exploring inorganic structures to exit the real estate projects lending business or at least reduce its exposure to the segment by partnering with other financiers.

He also said that the firm is trying to join specialised funds to develop a platform that would commit cash to infrastructure initiatives. He added that it would help the company's debt reduction efforts in the division.

According to analysts, management has outlined its Lakshya 2026 objectives, which include expanding retail to more than 80% of the balance sheet, plans to create >25% CAGR retail growth, and improved asset quality.

Image Source

Also read: CPP Investments buys Brookfield India road portfolio for Rs 9,375 cr

Apollo Global Management is in advanced talks with L&T Finance Holdings Ltd to buy real estate debts worth Rs 8,000-9,000 crore. The L&T Group is trying to shift its focus to the retail sector by reducing its infrastructure and real estate exposure. The $1 billion deal will allow L&T to get cash up front rather than in instalments, allowing it to deleverage its balance sheet. Meanwhile, the private equity firm will get a portfolio of real estate assets with some first-loss protection and the opportunity to build a relationship with the engineering giant. According to the media sources, the sale will be completed in a few weeks and would be carried out under a freshly formed alternative investment fund (AIF) structure, similar to Apollo's agreement with Piramal Capital & Housing Finance, which is part of Piramal Enterprises. L&T Finance's real estate book decreased to Rs 11,210 crore in the fiscal year (FY) 2022 from Rs 12,945 crore the previous FY. The financial services branch is owned by L&T, which controls 66.26% of the company. The debt on the L&T Finance real estate book would be refinanced using bonds or non-convertible debentures (NCDs) and moved to the AIF, which would be jointly held by Apollo Global and L&T Group. The average rupee return on these loans is 15-16%. Trilegal and Shardul Amarchand Mangaldas were the legal advisors. An L&T Finance official told the media that L&T Finance has already embarked on the chosen strategy of becoming a retail finance company, and in that direction, they would be limiting their exposure to wholesale finance in general and real estate finance in particular. By FY 2025-26, they plan to have retailised their loan book to the extent of over 80%, with predicted retail loan growth of nearly 25% CAGR because of fintech at scale, in which they have invested heavily in recent years. Dinanath Dubhashi, L&T Finance managing director and chief executive, revealed that the company is exploring inorganic structures to exit the real estate projects lending business or at least reduce its exposure to the segment by partnering with other financiers. He also said that the firm is trying to join specialised funds to develop a platform that would commit cash to infrastructure initiatives. He added that it would help the company's debt reduction efforts in the division. According to analysts, management has outlined its Lakshya 2026 objectives, which include expanding retail to more than 80% of the balance sheet, plans to create >25% CAGR retail growth, and improved asset quality. Image Source Also read: CPP Investments buys Brookfield India road portfolio for Rs 9,375 cr

Next Story
Infrastructure Transport

JNPA Becomes First Indian Port to Cross 10 Million TEU Capacity

The Jawaharlal Nehru Port Authority (JNPA), located at Uran in Navi Mumbai, has become the first port in India to achieve over 10 million TEUs (twenty-foot equivalent units) in container handling capacity.With the recent expansion, the port now operates five container terminals with a combined capacity of 10.4 million TEUs, alongside two liquid and two general cargo terminals.Handling more than half of India’s container traffic, JNPA processed 7.05 million TEUs in 2024 and has moved 15.39 million tonnes of containers and 16.64 million tonnes of total cargo in the first two months of FY 2025â..

Next Story
Infrastructure Transport

Nod for Rs. 36.26 billion Expansion of Pune Metro Line 2

The Union Cabinet has approved the Rs.36.26 billion expansion of Pune Metro Line 2, adding 12.75 km of track and 13 new stations to improve east–west connectivity across the city.The project aims to link Pune’s urban core with rapidly growing suburbs, supporting the city’s rising demand for efficient and sustainable transport solutions. This expansion is part of Corridor 2 of the Pune Metro and includes two key routes: Vanaz to Chandani Chowk (Corridor 2A) and Ramwadi to Wagholi/Vitthalwadi (Corridor 2B).It will connect residential, IT, and educational hubs in areas such as Bavdhan, Koth..

Next Story
Infrastructure Transport

Assembly begins for ‘Nayak’ TBM on Thane– Borivali Twin Tunnel Project

The assembly of ‘Nayak’, the first of four Tunnel Boring Machines (TBMs) for the Thane–Borivali Twin Tube Tunnel Project, has commenced at the Thane site. Built by German firm Herrenknecht AG and deployed by Megha Engineering & Infrastructure (MEIL), the TBM marks a key milestone in Mumbai’s ambitious 11.8-km underground road corridor beneath Sanjay Gandhi National Park.The twin tunnels will reduce the Thane–Borivali travel distance by 12 km and decongest Thane Ghodbunder Road. ‘Nayak’, with a 13.2-metre diameter, is designed to bore through challenging geological conditions ..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?