Upload
truongkhanh
View
215
Download
2
Embed Size (px)
Citation preview
INDIA HOUSING FUND
November 2017India’s Housing sector set for recovery backed by vision of the Prime Minister and landmark reforms
2
OPPORTUNITY IN HOUSING SECTOR IN INDIA
• Urbanization and Housing Demand
• Government as a Catalyst
• Demand (PMAY1) and Supply Side (80 IBA2) Incentives
• Affordable housing: Win-win for All Stakeholders
• Distressed Opportunities
1 PMAY: Pradhan Mantri Awas yojana, plan announced by the government to boost housing demand2 80 IBA: Section included in Income tax Act (2016-17 finance bill), to provide tax benefits to affordable housing projects
URBANIZATION TO DRIVE STRONG DEMAND FOR HOUSING
3
Source : Making ‘The Dream of Millions’ A Reality – Assessment of Affordable Housing in India (JLL, Oct 2016); World Bank; Census of India, 2011; CIA, 2015; World Urbanization Prospects (United Nations, 2014Revision) *Mega cities (population of greater than 10 mn) include Greater Mumbai Urban Agglomeration (UA), Delhi UA and Kolkata UA
33%54% 56% 65% 74% 82% 86% 94%
Urbanization Percentage Globally
• Urbanization is on the rise in India, but the country
has a long way to go to match global benchmarks
• Urban towns (population greater than 1 mn) have
seen an increase in their share from 23.0% to
29.7% over the last decade*
• Number of metropolitan cities (population greater
than 1 mn) has risen sharply, from 35 to 53, during
the last decade
Come a long way, but way to go
17.919.8
23.125.5
27.7
32.7
39.5
44.8
50.3
0
10
20
30
40
50
60
1960 1970 1980 1990 2000 2015 2030 2040 2050
Urbanization growth in India
HOUSING FOR ALL MISSION NEEDS INVESTMENT OF MORE THAN USD 2TRILLION IN 5 YEARS
4
• 90% of housing need is in the Economically Weaker Segment (EWS), Low and Mid income groups (LIG and MIG)
• Total cumulative housing requirement in these three segments is around 4.14 Cr units till 2022 translating to
~ 1 Cr units per year
Cumulative investment of over INR 139 Lakh Cr is required till 2022 to meet this target.
This translates to annual investment in excess of INR 28 Lakh Cr
Source : Funding the vision – Housing for all by 2022 (KPMG, NAREDCO, 2014); Census of India, 2011; Report of the technical group on urban housing shortage (2012-17), Ministry of Housing and Urban Poverty Alleviation; Working Group on Rural Housing for XII Five Year Plan, Ministry of Rural Development
Segment Target Income Group
% of Housing
Need
Typical Area (sq ft)
Number of houses (Cr)
Cost of House (INR
lacs)
Total Investment
(INR Lakh Cr)
Social Housing EWS (1 RK) 40% Up to 300 1.84 5 31.28
LIG Housing LIG (1 BHK) 30% 550-750 1.38 15 – 20 23.46
MIG Housing MIG (2-3 BHK) 20% 800-1200 .92 40 – 45 38.64
High end and Luxury
High or rich class (above 2-3 BHK)
10% Above 1200 .46 Above 50 46.00
Total 4.60 139.38
HOST OF INITIATIVES BY GOVERNMENT TO BOOST HOUSING
5
“Housing for all by 2022”- PM Narendra Modi
Interest Subsidy of between 3%-6.5% on Housing Loans (under PMAY – CLSS*)
IMPACT ON REAL ESTATE• Increased velocity• Reduced project cost• Easy access to pool of capital
Exemption from GST^ for Affordable Housing
100% deduction in profit for Developers (u/s 80 IBA)
Infrastructure status = Cheaper capital
Easing of entry and exit norms for Foreign Direct Investment
Continuous reforms highlight government focus on affordable housing
Digitization of Land Records
*CLSS – Credit Linled Subsidy scheme ^GST : Goods and Service Tax
DEMAND SIDE INCENTIVE
6
Prime Minister Housing Scheme (PMAY*) - Credit Linked Subsidy Scheme (CLSS)
CLSS Scheme
Type
Eligibility Household
Income (INR lakhs)
Carpet Area-Max
(sqm)
Interest Subsidy
(%)
Subsidy calculated
on a max loan of
(INR lakhs)
Maximum
Subsidy (INR
lakhs)
EWS and LIG Upto 6 60 6.50 % 6 2.7
MIG 1 > 6 till 12 90 4.00 % 9 2.4
MIG 2 > 12 till 18 110 3.00 % 12 2.3
CLSS provides substantial relief for LIG / MIG apartments
* PMAY : Pradhan Mantri Awas Yojana^ Source : Economic Times
• This incentive has provided a great push to buyers in this segment, where the subsidy can range from 15-30%of the cost of the house
• Total subsidy given under this scheme is INR 824 Cr as of July 13, 2017^• The main challenge for large section of population employed with unorganized sector has been lack of formal
documents of identification, address and income. This is gradually being filled by introduction of Aadhar,linking of PAN with Aadhar and in-depth assessment of income cycle of the customer
SUPPLY SIDE INCENTIVE
7
Section 80 IBA
Criteria Metro Cities* Non-Metro Cities
LocationWithin a municipal limit or 25 KMs from
Municipal limit
Within the Jurisdiction of any Municipality or
Cantonment board
Total Area of Project Not Less than 1000 Square Meter Not Less than 2000 Square Meter
Each Residential Unit (Carpet) Does not Exceed 30 Square Meters Does not Exceed 60 Square Meters
Project utilize % Permissible of
Floor Area RatioNot Less than 90% Not Less than 80%
Built-up Area of Shop or other
commercial establishment
Does not exceed 3% of aggregate built-up
area
Does not exceed 3% of aggregate built-up
area
* Metro cities here include Chennai, Delhi, Kolkata and Mumbai
Supply side incentives to encourage developers to increase launches in this segment
Tax exemptions provided on the supply side i.e developers to promote further launches in this segment(announced in Union Budget, Feb 2017)
Government has kept size of 60 sqm outside the four Metro cities and applied the area limit on Carpet areabasis instead of Built-up area. This shall help a number of projects to qualify under the provision
AFFORDABLE HOUSING: WIN-WIN FOR INVESTORS, DEVELOPERS & HOME BUYERS
8
GOVERNMENT
LAND OWNER / DEVELOPERS• Transparency and compliance to build
credibility of developers• Attract substantial amount of capital• Demand side dynamics and
government support to provide a viablebusiness model
INVESTORS
• Demand and supply side push tofacilitate urbanization
• Fulfilling dream of own house formillions to create feeling of social justice
• Better risk adjusted returns• Long lasting social impact on large
population through investment inAffordable Housing sector
• Confidence in under construction projects• Dispute resolution mechanism available• CLSS to provide substantial relief to buyers
CONSUMERS
Organized Real Estate sector poised to attract
more investment in Housing
DISTRESSED OPPORTUNITIES CREATED BY DEMONETISATION, RERAAND GST
9
Attractive funding opportunities being created by regulatory changes and demand-supply disequilibrium
Distressed Opportunities :• The real estate industry has witnessed a year with several macro changes which will bring about an
overall change in the way the industry functions. Demonetisation, GST and RERA have changed theindustry from an unregulated to a regulated sector bringing about a paradigm shift in the functioning ofbusiness
• Developers will not be able to market a project without getting approvals and 70% of the projectrevenue will have to be kept in escrow to be utilized towards land and construction. This will increasethe initial capital requirement
• GST and RERA have also increased governance requirements and need developers to be moreaccountable and follow robust processes
• There is a supply overhang in certain segments and certain micro markets because of which developersare under pressure with unsold inventory creating attractive investment opportunities
• The sector is expected to consolidate whereby smaller players are expected to join hands with biggerplayers to execute projects or completely sell out. This is expected to create attractive fundingopportunities
10
IIFL CREDENTIALS• Fund Raising Credentials and Track Record
• Real Estate Track Record
• IIFL Group Synergies
IIFL’S FUND RAISING CREDENTIALS: TRUST, TRANSPARENCY & TRACK RECORD
• IIFL has raised and managed over INR 25,000 Cr in diverse investment strategies across asset
classes
• IIFL has raised more than INR 6,000 Cr in the last 5-6 years for Real Estate investments from
investors in addition to proprietary investments
• IIFL has fully exited and returned monies for the first two funds raised in 2012 and 2013 to the
tune of ~1,200 Cr at a Net Return of ~19.6% and 18.6% respectively
•A total of 74 investments over the last 7 years of which we have fully exited 47 investments.
•Across funds we have exited 10 investments of ~850 Cr over the last 6 months
• IIFL Real Estate team has combined experience of more than 100 years across various geographies
pan-India
11
FULLY EXITED TWO FUNDS WITH GROSS MULTIPLE OF MORE THAN 1.5X
12
Proven exit track record with industry leading returns
Fund NameLaunch
Year
Amount Raised
(INR Cr)
No of RE Investments
Fully Exited RE
Investments
Gross IRR (in INR terms)1
Net IRR (in INR terms) 2
IIFL Real Estate Fund (Domestic) - Series 1 2012 661 12 12 19.6% 15.9%
IIFL Income Opportunities Fund 2013 615 13 13 18.6% 16.9%
TOTAL (A) 1,276
Fund NameLaunch
YearAmount Raised
(INR Cr)No of RE
Investments
Fully Exited RE
Investments
Portfolio IRR3
IIFL Income Opportunities Fund Series - Special Situations
2014 757 11 7 21.9%
IIFL Real Estate Fund (Domestic) - Series 2 2015 1,026 12 4 20.1%
IIFL Real Estate Fund (Domestic) - Series 3 (Class B) 2016 352 3 - 16.6%
IIFL Real Estate Fund (Domestic) - Series 3 (Class C) and RE PMS
2015-16 524 8 3 19.3%
IIFL Real Estate Fund (Domestic) - Series 4 2016 182 11 3 18.1%
IIFL Yield Enhancer Fund 2016 760 24 8 22.0%
TOTAL (B) 3,601
GRAND TOTAL (A+B) 4,8791IRR at fund level, gross of expenses 2 Net IRR post all fees and expenses 3 Portfolio IRR projected for full fund tenure, subject to contracted returns being received from all investments.All IRR/returns quoted on a pre tax basis
Fully Exited Funds – Average Fund Duration of 2.5 to 3 Years
Existing Funds
IIFL GROUP SYNERGIES ACROSS VALUE CHAIN IN HOUSING FINANCE
13
Project Finance Construction & Project Completion
Sale to Home Owners & Possession
Availing of Home Loan
IIFL Retail Distribution hasstrong network acrossIndia with 4mn customersacross 1200 locations. Wehave also assisted clients inbuying and selling ofproperties across severallocations
Total loan AUM of USD3.4 billion retail loanswith a fast growingmortgage finance book ofINR 11,000 Cr. More thanINR 450 Cr disbursedunder PMAY-CLSS*scheme in last 2 years
IIFL Finance and HFCprovide finance forconstruction and workingcapital requirements ofresidential andcommercial projectsacross variousgeographies
IIFL Group has invested inover a 100 transactionsover the last several years.We have developed skillsfor legal, technical andcredit due diligence whilecompleting theinvestments
IIFL AMC and IIFL Finance
IIFL Finance and Housing Finance (HFC)
Retail Distribution HFC
* Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme
14
PROPOSED FUND STRATEGY• Project Selection Criteria
• Decision Making Process
• Representative Investment Pipeline
• Key Terms
• Taxation
PROJECT SELECTION CRITERIA
15
Mumbai
Pune Hyderabad
Chennai
Bengaluru
Ahmedabad
Jaipur
NCR
Kolkata
Indore
Raipur
Lucknow
Focus on 10-12 top Tier I & Tier II cities
•Markets with high growth rates with basic amenities, physical and social infrastructure
•Reputed development partners with successful execution track record
•Prior experience in Affordable Housing segment
•Project Sizes in the range of 5-15 lakh sq ft
•Average Unit sizes in the range of 300-1200 sq ft
PMAY –
CLSS80 IBA
Mid-Income
Housing
Distressed
Investments
Fund
AllocationUpto 30% Upto 50% Upto 50% Upto 30%
SECURED INVESTMENT STRUCTURES WITH BUILT IN UPSIDE
16
REPRESENTATIVE INVESTMENT STRUCTURE
Individual dealtenure of 4-5 years
No land aggregation risk*
No significant approval risk^
Debentures to create securityand establish a base return withan upside
Ring fencing the project withmortgage of land / developmentrights and escrow mechanism forproject cash flows
Corporate / Personal guarantee of promoters
Representation on SPV Board forproject monitoring and stepping inrights
* The Fund would invest in transactions where clear title land is already identified and part payment may be made directly toland owners/authorities for land/development rights^ The Fund would not invest in projects where time consuming/exceptional approvals are pending to be received
Investment level return of 18-20% divided between annual cash flow return of 8-9% and upside sharing
of around 12%
DECISION MAKING PROCESS
17
Fund Management Team forwards recommendations to the Investment Committee
Investment Made
Investment team accordingly modifies the investment
proposal
Formal note created
No
Research includes: a. Investment meritsb. Market dynamics
Fund Management team reviews the investment opportunity
Investment idea is dropped
Positive
Additional covenants or enhancement suggested
Investment Committee votes on the Investment Proposal
Investment idea is dropped
Yes
Negative
Fund Management Team carries out detailed due diligence (DD) of the Investment
DD Includes:a. Legal / Title Searchb. Technical / Valuation
Positive review?
Investment Approved?
Investment opportunity identified by Investment Team
DD Positive?
No
Investment Documents executed. Pre-Investment Audit done
Investment idea is dropped
Yes
Additional covenants or enhancement suggested
Investment team accordingly modifies the investment
proposal
REPRESENTATIVE INVESTMENT PIPELINE – 1
18
•Mid Income residential project in anestablished micro-market
•Location: Projects located in the city ofBangalore in a prime IT location
•Project Size: First phase of project size isaround 25 lakh sq ft to be developed inphases with total number of apartments inthe range of 2,000 - 2,500
•Unit / Ticket size : Average unit sizes in therange of 700 to 1200 sq ft with average ticketsizes in the range of INR 50 to 75 lakhs
•Completion Timeline: Between 5-7 years
•Status at entry: Partial land acquired, masterplanning done
REPRESENTATIVE INVESTMENT PIPELINE – 2
19
•Mumbai based developer with local market expertise
•Mid-income housing project available at distress valuation
•Location: Project located in Dahisar, a western suburb of Mumbai
•Project Size: Approx. 5.5 lakh sq ft with around 900 units
•Unit / Ticket size : Average unit size of around 700 sq ft with average ticket size of around INR 70-80 lakhs
•Completion Timeline: Between 5-6 years
•Status at entry: Rehab Construction underway
REPRESENTATIVE INVESTMENT PIPELINE – 3
20
•Leading Mumbai based developer
•Residential housing project with compactapartments qualifying for 80 IBA
•Location: Project located in the WesternSuburb of Kandivali
•Project Size: Approx 5.5 lakh sq ft witharound 1,000 units
•Unit / Ticket size : Average unit size of 320sq ft with average ticket size of around INR50-75 lakh
•Completion Timeline: Between 4-5 years
•Status at entry: Initial approvals received.Site vacation in progress
KEY TERMS
21
Target Fund Size INR 2,500 Cr
Sponsor Commitment Up to INR 185 Cr (including Anchor Investor)
Fund Term5 years from the date of final closing* and with possible extension of 1+1 year, subject toapproval of two-thirds of the unit holders by value of their investment in the Fund
Drawdown Tenure Up to 24 months from the close of first drawdown
Initial Contribution 15% - 25% of the Commitment Amount
Target Return (Gross IRR) 18-20% per annum in INR terms
Hurdle Rate 14% per annum in INR terms (pre-tax, post-expense)
NAV Frequency Monthly (After Final Closing)
* Final closing shall not occur later than 18 months from the date of Initial Closing
Share Class Class A Class B Class C Class D Class E Class F Class G
Minimum Commitment (INR Cr) 1 2 5 10 20 50 100
Set-up Fee (Fund Incorporation)Upto
2.00%
Upto
2.00%
Upto
2.00%
Upto
2.00%
Upto
2.00%Nil Nil
Management Expense ( charged on net
capital contribution)2.00% p.a.
1.75%
p.a. 1.50% p.a. 1.25% p.a. 1.00% p.a. 0.75% p.a. 0.5% p.a.
Performance Fee (over and above the
Hurdle Rate with Catch-up)20% 17.5% 15% 12.5% 10% 7.5% 5%
^Share Class S is for subscription by Sponsor, Investment Manager, IIFL Group Companies, Associates, Shareholders of Group Companies andEmployees of IIFL GroupCo-investment opportunity is available at the discretion of the Investment Manager , as per terms of the PPM.
TAXATION
22
•The Fund is registered with Securities and Exchange Board of India (‘SEBI’) as a Category II Alternative
Investment Fund, in accordance with the SEBI (Alternative Investments Funds) Regulations, 2012 (the ‘AIF
Regulations’)
•As per the Finance Act, 2015, a so called ‘tax pass-through’ status has been extended to Category II AIFs.
Accordingly, the income of the Fund, other than that taxable under the head ‘profits and gains from business or
profession’, should be taxable directly in the hands of Investors in the same manner as if it were the income
accruing or arising to, or received by the Investor, had the investments by Fund been made directly by them.
•The Fund will be required to deduct tax at source in respect of income (other than “business income”) that is paid
to or credited to the account of the investors at a rate of 10% (plus applicable surcharge and education cess).
The Fund would issue a consolidated statement to investors towards the same. Prospective Investors are urged to
consult their own tax advisers in this regard and only rely on their advice.
23
INVESTMENT TEAM
• Experienced Real Estate Team
• Proposed Investment Committee
EXPERIENCED REAL ESTATE TEAM
24
Balaji RaghavanCIO, Real Estate Investments and Fund Manager, India Housing FundBalaji brings on board more than 20 years of experience in the Real Estate Finance and Banking industries.Since joining IIFL in 2010, he has led the real estate business, building an investment book of more than USD 1bn with over 60 transactions. Balaji heads the domestic real estate funds and manages ~40 top developerrelationship across the country.
Prior to joining IIFL, he headed the mortgage finance business for ICICI Bank and he was a key contributor inICICI’s mortgage business growth and he successfully managed a ~USD 12 bn portfolio across variousparameters of distribution, risk and relationships in the industry. He was one of first few members of ICICI'sconsumer banking team when the bank started its retail business. Previously he had worked with ABN AmroBank N V as a Regional Business Head.
Abdeali TambawalaPartner, Real Estate InvestmentsAbdeali has been part of IIFL since 2009 and has experience of 12 years across mortgages, constructionfinance, debt and equity syndication. His area of specialization includes sourcing real estate opportunities onthe syndication and structuring side.
He holds a Post Graduate Diploma In Management and his previous assignment was with Kotak MahindraBank where he advised clients and corporates on acquisitions and structured lending. As a part of the fundmanagement team he has overseen multiple investments across Mumbai, NCR, Bengaluru and Pune withinvestments and exits exceeding ~USD 500 million
FUND TEAM WITH COMBINED EXPERIENCE OF OVER 100 YEARS
25
Investment & Fund Management
Saurabh GuptaSaurabh brings on board more than 15 years of experience in real estate, banking and consulting. He has previouslyworked with Citigroup, ICICI Bank, Royal Dutch Shell and PricewaterhouseCoopers in India and the UK. He joined IIFLgroup in 2010 and has since been involved in over 30 Real Estate transactions with investments exceeding USD 200million, and exits of ~USD 100 million across Mumbai, Chennai, Bengaluru and Jaipur. He holds an MBA from LondonBusiness School, UK.
Vivek MishraVivek has over 10 years experience in various strategic divisions of leading companies. He started his career in theIndian operations of Unilever. He was then a part of ICICI Bank where he was the Zonal business head for Real Estatedivision, managing sales, risk, and underwriting. At IIFL, he is an active part of the investment team and he hasoverseen multiple investments across the country exceeding USD 500 million. He also plays a part in commercial sale,debt syndication and asset management. He holds an MBA from the Indian School of Business.
Anurag SolankiAnurag brings on board over 17 years of exposure in Real Estate, Telecom & Banking services with names like GECapital, Vodafone, ABN Amro Bank and Standard Chartered Bank in Direct, Corporate and Government Sales. Anuragheads Developer Funding for Northern India at IIFL and overseen investments across NCR, Jaipur, Chandigarh andLucknow where he has overseen investments exceeding USD 300 million.
Amit JainAmit is a Chartered Accountant with 14 years experience in Risk and Asset Management. His previous assignmentswere with ICICI Bank ,Reliance Capital Finance & Aditya Birla Finance his responsibilities included corporate andretail finance, taxation, company law, underwriting and syndication. He runs the risk management process - analysing,assessing & monitoring creditworthiness of real estate investment proposals based on various risk parameters andproject feasibility.
EXPERIENCED INVESTMENT COMMITTEE TO PROTECT INVESTOR INTEREST
26
R. VenkataramanCo-Promoter and Managing Director, IIFL Holdings Ltd.Mr. R. Venkataraman joined IIFL Holdings Board in 1999. He has contributed immensely in the establishment of various businesses andspearheading key initiatives of the group over the past 18 years. He previously held senior managerial positions in ICICI Limited,including ICICI Securities Limited, their investment banking joint venture with JP Morgan and Barclays – BZW. He worked as an AVPwith GE Capital Services India Limited in their private equity division. He has varied experience of more than 26 years in the financialservices sector. He is a B.Tech from IIT, Kharagpur and an MBA from IIM, Bangalore.
Amit ShahCo-Founder, IIFL Investment Managers & CEO, IIFL Asset Management BusinessAmit drives the firm’s international footprint across offices in New York, Houston, London, Geneva, Mauritius, Dubai, Singapore andHong Kong and active relationships across the global investor community. Having built Institutional & NRI HNI relationships globallyfor the group, the firm’s assets under management today stands at over US$ 5 billion. Amit has more than 18 years of experience in thefinancial services industry, which include 11 years of advising global institutional investors. A passionate leader, he is responsible forbuilding an ownership-driven team consisting of the best global talent. Earlier, Amit was associated with Kotak Mahindra Inc, NewYork, Citi Group’s Wealth Management business and IDBI bank in various leadership roles. Amit was recognized with the ‘NRI of theYear’ Award 2016, for Asia Pacific Region. Amit is a Chartered Financial Analyst (CFA) from ICFAI and holds a Bachelor’s degree inCommerce.
Prashasta SethCIO, IIFL Asset Management Ltd.Prashasta is responsible for all the equity funds managed by IIFL Asset Management. He joined the firm in 2008 and has beeninstrumental in setting up and growing the equity desk. Prashasta has over 16 years of experience in the financial services industry. Hehas been managing and advising pooled assets and investor portfolios. He specialises in developing investment strategies, generatingstock ideas and creating actionable research reports. In his earlier roles, he worked for J.P. Morgan, London and headed Irevna - aStandard & Poor’s company. He holds a Postgraduate Diploma in Business Management from the Indian Institute of Management (IIM)Ahmedabad and a Bachelor’s of Technology degree from the Indian Institute of Technology (IIT) Kanpur.
Investment Committee
27
ABOUT IIFL• IIFL Group
• Key lines of Business
IIFL GROUP
28
Fastest GrowingWealth Management
Company in India
Over 1,33,000 CrsAssets Under Advice,
Distribution and Custody
The Capital CodeProposition, Platform, People and Processes
Employee Owned19.4% of the company is owned by employees
MottoOwnership Mindset and Alignment of Interests
22 Officesacross 8 countries
and 15 Indian cities
IIFL Investment Managers• IIFL Holdings (IIFL:IN): offering a full service platform for Institutional, Private Wealth and Retail clients
•Group includes Equity Broking, Institutional Equities, Private Wealth, Investment Banking, Credit and Insurance
•Key investors in the Group:
- Fairfax: Prem Watsa's Fairfax Group holds 35.5%
- General Atlantic: invested $173mn in IIFL Wealth for 21.6% equity (EV $780mn)
- CDC: sovereign fund owned by UK government acquired 15% in IIFL Finance (EV $ 950mn)
One of India’s fastest growing financial services groups
* As on Sept 30, 2017
IIFL INVESTMENT MANAGERS
29
• Distribution, Advisory and Asset Management are established businesses, account for 95% of total assets
• Lending is a newer business; significant growth visibility in the immediate future
Asset Management
• AUM INR 23,000 crs• Mutual Funds and AIFs
Advisory and Succession Planning
• AUM ~ INR 35,000 crs• Advisory Services • Wealth Structuring• Succession Planning• Corporate and Family
Structuring
Distribution
• AUM ~ INR 80,000 crslargest private wealth management AUM)
• Broking, Distribution• Customized
Discretionary strategies
Lending
• Loan Book ~INR 5,000 crs• Loan Against Securities• Margin Funding• Loan Against Property• IPO Financing
Promoters
Others
29%
35.5%
35.5% 57.2%
IIFL Holdings
19.85%
Employees
22.95%
Institutional investors of repute (Fairfax, GA) lend significant expertise
Shareholding pattern of IIFL Holdings and IIFL Investment Managers is as at Sept 30, 2017
30
RISKS & DISCLAIMER• Key Risks
• Disclaimer
KEY RISKS • Real Estate Sector Risks:
Various aspects such as construction risks, safety risks, zoning risks, permit risks, changes in tax laws and accounting standards,lending regulations, government policies related to Real Estate Sector, environment laws, health and safety laws, government landacquisition, acts of terrorism and acts of nature may negatively impact returns of the fund. Real Estate sector with long gestationperiods has experienced considerable fluctuations and cycles in the past. While the target segment of affordable housing is quiteresilient, a broad based deceleration in economic growth will lead to difficulties in sale of units in investee projects. Unemployment,inflation and reduction in credit availability or rise of interest rates in particular will significantly reduce demand for units in citieslike NCR, Mumbai and Bangalore.
• Investment Primarily in Illiquid Securities:Despite underlying investments being listed or to be listed fixed income instruments, the liquidity in these instruments may be thin.These investments may be difficult to value, sell or otherwise liquidate and the risk of investing in such securities is greater than therisk of investing in more frequently traded securities.
• Credit Risk:If any of the investee companies defaults in meeting its obligations towards the Fund, investment returns from the fund will benegatively impacted.
• Legal and Regulatory Risks:The Fund may have difficulty enforcing contractual obligations or judgments against Indian companies. Regulatory investmentrestrictions applicable to the Fund may impede its ability to invest in certain instruments limiting its ability to generate adequatereturns or cash flows.
• Local Laws, Political and Economic Risks:Real Estate activities in India are subject to local municipal and state regulations and taxes in addition to central regulations and taxes.Any adverse changes in same or local economic conditions or political stability may have adverse impact due to nature of affordablehousing developments.
• Currency:Investment in Unhedged Share Class are subject to USDINR exchange rate fluctuations. Developments in Global financial markets inaddition to developments in Indian financial markets, economic and fiscal conditions may impact currency movement.
• Liquidity:The Fund is close-ended and organized primarily for long-term investors, and is not intended to be a trading vehicle.
31
DISCLAIMER
32
The purpose of this presentation is to provide general information to prospective investors in a manner to assist them in making investmentdecision. It does not purport to contain all the information that the prospective investor may require. The presentation is made for informationalpurposes only and should not be regarded as an official opinion of any kind or a recommendation. It does not constitute an offer, solicitation or aninvitation to the public in general to invest in the AIF. This presentation is intended for the use of prospective investors only to whom it is addressedand who is willing and eligible to invest in AIF. The information contained in this presentation is obtained from sources believed to be reliable. We donot represent that any information, including any third party information, is accurate or complete and it should not be relied upon without properinvestigation on the part of the investor/s. IIFL Wealth Management Limited (IIFLW) or any of its director/s or employees does not assure/giveguarantee for any accuracy of any of the facts/interpretations in this document, and shall not be liable to any person including the beneficiary forany claim or demand for damages or otherwise in relation to this opinion or its contents. This presentation is qualified in its entirety by theInformation Memorandum/PPM and other related documents, copies of which will be provided to prospective investors. All investors must read thedetailed Private Placement Memorandum (PPM) including the Risk Factors and consult their tax advisors, before making any investmentdecision/contribution to AIF. Capitalized terms used herein shall have the meaning assigned to such terms in the PPM and other documents.
NOTE:
IIFL Wealth Management Limited (IIFLW) is Co-sponsor of the Scheme. IIFL Wealth Management Limited (IIFW) is holding company of InvestmentManager/Trustee Company of the Scheme and Co-Sponsor to the Scheme which may receive distribution or any other fees in this connection.Further, IIFLW and its group, associate and subsidiary companies are engaged in providing various financial services and for the said services(including the service for acquiring and sourcing the units of the fund) may earn fees or remuneration in form of arranger fees, referral fees, advisoryfees, management fees, trustee fees, Commission, brokerage, transaction charges, underwriting charges, issue management fees and other fees.
The contributors should note that the Scheme is neither approved or recommended by SEBI nor does SEBI certify the accuracy oradequacy of the PPM of the Scheme.
THANK YOU.