Mumbai: The Life Insurance Corporation (LIC) of India has invested Rs 225 crore in 10-year bonds of KKR India Asset Finance (KIAFL). The bonds, which carry an AA rating, offer a coupon of 8.01% payable quarterly.
KIAFL is part of the KKR Group and specialises in providing secured lending to real estate projects in India. The company focuses on under-development and near-complete real estate projects, primarily in the residential space. It also evaluates early stage development projects where key consideration includes partner quality and project location. The focus is mainly on mid-market residential projects.
KIAFL was originally incorporated as non-banking finance company KKR India Financial Services. According to rating agency Crisil, KIAFL is KKR’s real estate credit vehicle in India and is aligned with the parent’s global strategies for scaling up the realty business globally and in Asia.
“While KKR holds only 9.7% in KIAFL, it has complete management and board control over the latter. Importantly, KKR’s equity contribution of $23.2 million (Rs 165.9 crore) in KIAFL has been infused directly from KKR’s balance sheet, and not from funds managed by it.
The remaining equity stake is held by leading global limited partners (LPs, or partner investors in KKR’s funds), and an Indian high net worth individual, who have collectively infused equity worth $221.9 million (around Rs 1,584.6 crore) in KIAFL,” Crisil said. According to Crisil, the shared brand implies a strong moral obligation on KKR to support KIAFL.