HDFC Capital Advisors is placing a large bet on cheap and mid-income housing, intending to spend more than $2 billion in this sector by the end of 2025 across India's key real estate markets to assist in the easing of supply side limitations.
The biggest affordable housing platform in the world, which has the Abu Dhabi Investment Authority (ADIA) as a major investor, is working towards its medium-term objective of funding one million affordable houses in India through platforms already in place that have been established with top developers.
As per Vipul Roongta, MD & CEO of HDFC Capital Advisors, this initiative represents a $500 billion business opportunity requiring investments of at least $100 billion from public, private markets, and debt sources.
The fund aims to deploy a minimum of $1 billion annually over the next two years in affordable and mid-income housing across India's top 15 cities, including Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad. He noted that within the last six months, the fund had already committed $1 billion to projects in this category, underscoring the substantial capital demand in this sector.
HDFC Capital manages a $3.5 billion funding platform and serves as the investment manager for HDFC Capital Affordable Real Estate Funds 1, 2, and 3, aligned with the Indian government's objective to boost housing supply. ADIA, with a 10% stake in HDFC Capital Advisors, is the primary investor in these funds. Roongta noted that, globally, ADIA's investment in HDFC Capital marks its first venture into fund management.
The funds managed by HDFC Capital provide long-term, flexible financing throughout the lifecycle of affordable and mid-income housing projects, including early-stage funding. Additionally, they invest in technology companies involved in the affordable housing ecosystem, such as construction technology, fin-tech, and clean-tech. HDFC Capital's goal is to finance the development of one million affordable homes in India through innovative financing, strategic partnerships, and technology, all while prioritising sustainability
