Oaktree, a subsidiary of Brookfield, invests in real estate developer Omaxe of North India
In a significant move, real estate developer Omaxe Ltd has secured ₹500 crore in funding from global alternative investment firm Oaktree Capital Management L.P. This investment aims to accelerate project delivery and expand Omaxe's footprint in key North Indian markets.
Notable projects by Omaxe include the Omaxe New Chandigarh Township, World Street in Faridabad, Omaxe Chowk in Delhi's Chandni Chowk, and Royal Residency in Ludhiana. With this new funding, Omaxe is poised to unlock expansion opportunities in strategic growth markets.
Oaktree Capital, which manages around $203 billion in assets, set up its second India office in Hyderabad's HITEC City this year. The investment from Oaktree will be directed towards real estate projects, specifically aimed at speeding up construction timelines, reducing market dependence, and strategically investing in residential, commercial, and public-private partnership projects.
Omaxe's Managing Director, Mohit Goel, stated that the fund infusion will enable faster construction, reduced market dependence, and strategic investment in new opportunities. He added that this financial flexibility supports Omaxe’s expansion strategy and is expected to multiply value for both Omaxe and Oaktree as they target high-growth regions in North India.
Financially, Omaxe has enhanced its balance sheet by repaying ₹1,285 crore in principal debt, lowering its net debt to ₹300 crore. This improvement in the company's credit profile and reduced financial risk is a testament to Omaxe's strong financial management. The new funding from Oaktree carries no immediate repayment obligations, allowing Omaxe to direct a significant portion of the ₹500 crore towards accelerating construction.
Omaxe, founded by Rohtas Goel, entered the real estate sector in 2001 and went public in 2007. Currently, the company is present in 31 cities across eight states, with a diversified portfolio spanning various real estate projects. In the last fiscal year ended March, the company recorded property sales worth Rs 3,000 crore.
As Omaxe continues to grow and expand, it is worth noting that other players in the industry are also making moves. For instance, Strata, a fractional ownership platform, has surrendered its SM REIT license amid a legal dispute. Meanwhile, Morgan Stanley PE-backed Athulya is in talks for fresh funding.
This investment marks a significant milestone for Omaxe and Oaktree Capital. As Omaxe leverages this funding to deliver large-scale developments more rapidly, it is expected to create a positive impact on the real estate sector in North India.
Omaxe will strategically invest the received funds from Oaktree Capital in various real-estate projects, focusing on residential, commercial, and public-private partnership projects. With this investment, Omaxe aims to reduce market dependence, speed up construction timelines, and facilitate growth in high-growth regions within North India.
This financial infusion will not only support Omaxe's expansion strategy but also is projected to increase value for both Omaxe and Oaktree Capital as they venture into high-growth real estate markets in North India.
