JM Financial Group sets its focus to contribute in Real Estate Funding

A leading investment banking firm in India, JM Financial Group moves to provide funding for real estate projects via AIF and syndications transitioning to investment banking-driven circulation. The non-executive vice chairman of JM Financial Group, Vishal Kampani declares the deliberated Alternative investment Fund - AIF for land approval financing.

Vishal Kampani stated in an investors meeting that the group will arrange an Alternative investment Fund for land approval projects by utilizing the user interactions.

During the investor call, Kampani said, "It is just easier to do it (real estate financing) from an AIF platform doing it from an NBFC platform for reasons not just related to pricing and the regulatory forbearance, but also because it is more long-term capital with a lot of relaxation on interest services”.

The company said several factors led to this decision. Competitive pressures from banks have pushed down yields in key client segments, and regulatory ambiguities around land financing have created additional challenges. The recent draft regulations could see provisioning requirements for real estate and infrastructure finance go up to 5% from 0.4%, affecting the return on assets for new and existing loans.

As per the company statement, the JM Financial group is looking forward to restructure its entire businesses regarding credits and banking, which includes the sectors such as Real estate and banking for financial institutions. At the end of the March, extensive lending market declined to Rs. 4,917 crore which is 42 percent less from 8.445 crore in last year. The Group informed that this decision is led by several factors such as getting pressures from competitive banks which have strapped down in major client segments and administering uncertainties among land financing have collectively generated extra challenges. The latest draft regulations could display provisioning needs for financing in real estate and infrastructure to increase up to 5 percent from 0.4 percent.