NEW DELHI: The UK government-owned development finance entity CDC will invest $25 million in Tata Value Homes, its affordable housing projects, a senior company official has said. Apart from CDC, IFC, a member of the World Bank group, will also invest $25 million in the company as it ramps up construction of affordable homes and townships.
“We will deploy the funds for our projects in various cities and we are comfortable for the next two years,” Brotin Banerjee, CEO and MD of Tata Housing Development Company, told TOI. Tata Value Homes, a 100% subsidiary of Tata Housing Development Company, was set up in 2010 to focus on affordable housing projects. Banerjee said Tata Value also plans to raise international fund in the next six months to develop affordable housing townships in Africa and South Asian countries. The company has ventured into foreign markets such as Maldives and Sri Lanka and is developing townships. “This will be for 5 to 6 townships,” Banerjee said, but did not elaborate.
Founded in 1948, CDC is the UK’s Development Finance Institution (DFI), wholly owned by the UK government. CDC is one of the largest investors in private equity funds in South Asia, supporting 37 funds investing across the region, including in 25 out of India’s 29 states, according to its website. It aims to commit around $150 million each year to private equity funds investing in South Asia.
IFC is the largest global development institution focused exclusively on the private sector. It works with enterprises in about 100 countries and provided more than $22 billion in financing to developing countries in FY14.
Banerjee said affordable housing projects were picking up pace after the budget announcements and hoped to hand over 15,000 to 16,000 units in the next two years. The affordable units are in the range of Rs 16-45 lakh. He hoped that the segment will gather more momentum as the government incentives trickle down.The government had announced several incentives to give a push to affordable housing in the 2016-17 budget. In order to fuel activity in the housing sector, finance minister Arun Jaitley had proposed to give 100% deduction for profits to an undertaking from a housing project for flats up to 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019, and completed within three years of the approval.
The budget also proposed deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs 50 lakh.
Credits ET Realty