Mumbai's Runwal Group and global private equity company Warburg Pincus entered a deal for a retail mall platform. The joint venture between the two companies is worth $1 billion, according to Bloomberg Quint. The partners will raise the fund for the mall by committing around $200 million each in the form of equity plus $600 million more through debt.
The developer revealed the information through a statement from their office. They will be raising $1 billion and investing it in "high quality" shopping malls, which will be found in tier I, II, and III cities in India. These cities have a "sizeable" population and are also home to people with disposable incomes to spend, the statement further revealed.
The platform looks to build large shopping malls but isn't limiting their reach to that demographic. There are also plans to build cinema-anchored community malls and small hypermarkets to cater to families. Runwal Group already has experience in the area, with four malls in Mumbai already operating with a total leasable area of around 2 million sq ft.
Warburg Pincus is definitely shoring up their presence in India. In other news, the private equity firm has agreed to the acquisition of an 80% stake in Wadhawan Global Capital Ltd., VC Circle reported. It said that the education loan arm is giving 49.04% of its stake in Avanse Financial Services, while it is also buying a 30.63% stake in Dewan Housing Finance Corporation Ltd.
Warburg Pincus may be a majority stockholder, but it doesn't hold all the available stakes; International Finance Corporation, the World Bank's private sector arm, is in possession of the remaining 20% stake in Avanse. The details of the deal have also not been discussed to the public and neither Warburg nor Wadhawan released any details.
Perhaps preparing for the building of the retail malls, the deal will increase Pincus' net worth. Wadhawan, meanwhile, is making this latest move in a series of actions determined to ease the concerns of investors as well as to remove a bit of the debt it has incurred, due to suffering from a "liquidity crunch."
The combination has the makings of a "match made in heaven." The Runwal Group's strong knowledge of retail and operational experience in the region, combined with Warburg Pincus' expertise in supporting the creation of "market-leading enterprises", allows for a strong start in making developments aimed at becoming the top in the Indian market.
