JM Financial To Move Away From Its On-Balance Business Model

JM Financial Group has decided to fund real estate projects through the alternative investment fund (AIF) route and syndications, moving away from its on-balance business model.

JM Financial non-executive vice chairman Vishal Kampani said in investors call that the group will set up a strategic AIF for land and approval financing, using its client relationships to provide funding through it.

The group will transition towards an investment banking-led distribution and syndication business, he said, adding that real estate developers are also finding it easier to obtain early-stage financing from AIFs rather than non-banking financial companies (NBFCs).

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