Bahrain's Investcorp Bank Sees Sweet Spot In Indian Property Crunch

A Bahrain-based investment manager wants to fill a vacuum in lending to Indian property developers that have $18 billion of debt to repay, aiming to capitalise on a credit crunch that’s narrowed their borrowing options.
Investcorp Bank BSC, which manages about $23 billion of assets, plans to provide structured lending to developers faced with borrowing constraints, executive chairman Mohammed Mahfoodh Alardhi said in an interview in Mumbai.
The company started its India operations in January after acquiring the private equity and real estate funds of IDFC Alternatives Ltd.
Investcorp’s push isn’t without risks. Developers are struggling as loans become harder to get from non-bank lenders whose own funding is drying up. The sector is trying to shrug off sluggish sales and price declines that followed a 2016 crackdown on cash as well as new consumer protection and tax policies.
Annual debt repayments for developers stand at about 1.29 trillion rupees ($18 billion) against disposable income of 570 billion rupees, according to research firm Liases Foras.
“Real estate in India has headwinds but that’s where the opportunity set also stems from,” Alardhi said. “Core demand from end-users is there, developers need financing and there is limited supply.”
The alternative investment manager aims to lend to residential developers even as other overseas investors from New York-based Blackstone LP to Toronto-based Brookfield Asset Management Inc. have focused on office space and commercial properties.
That decision is a bet on housing demand from more than 400 million millennials in the world’s second most-populous nation, said Rishi Kapoor, co-chief executive officer at Investcorp.
There are several risks though in the residential housing market.
Regulatory hurdles, developers’ inability to deliver quality construction and corporate governance issues plague the industry, according to Anuj Puri, chairman at Anarock Property Consultants Pvt. Ltd.
The IDFC real estate funds that Investcorp acquired in India provide so-called structured senior credit to residential developers, with a focus on projects in five cities including Mumbai and Bengaluru, data provided by the company showed.
For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.
UAE Announces Major New Tax Rules
UAE introduces Cabinet Decision to amend tax rules and attract investment Read more
UAEs Maseera Acquires Egyptian Fintech ADVA
The move marks a critical milestone in Maseera’s regional expansion strategy Read more
Oman Mandates IBAN For Domestic Transfers From July 2025
The move follows the Oman Central Bank's implementation of the IBAN system for international transfers from March 31, 2... Read more
Egypt And Jordan Thank The European Parliament For New Financial Aid
The European Union members recently approved loans worth $4.4 billion in three instalments to Egypt and $555 million to... Read more
Standard Chartereds SC Ventures To Replicate Asia, Africa SME Model In GCC
SC Ventures to bring its successful SME building strategy in India, South East Asia and Africa to GCC, and plans to rol... Read more
UAE Central Bank Revokes Licence Of Dynamics Insurance Brokers For Regulatory Breaches
Dynamics Insurance Brokers "failed to comply with the licensing terms and requirements issued by the Central Bank and w... Read more