Apollo Global Management plans to lend about $1 billion to Indian developers this year, betting that the residential property market will recover as the pandemic eases. That’s an increase from the $750 million Apollo lent to Indian developers last year, two-thirds of which were for residential projects, said Nipun Sahni, a partner at the private equity firm. About 70 per cent of loans this year will go to homebuilders, with the rest going to commercial developers.

“Market volumes have returned to pre-Covid-19 levels, higher than in 2019 in some markets,” Sahni said. “It’s consolidating rapidly, and the number of unsold homes in India is at a 10-year low, which suggests prices may rise.”
India’s property market has rebounded strongly from the depths of the coronavirus pandemic as low-interest rates and developer discounts spur demand. Low inventory levels are likely to sustain a boom in the residential real estate market, with prices likely to rise 10 per cent in the nation’s top six cities, according to a May 10 Crisis Rating report. Sahni said the country’s office real estate market is benefiting from more hiring due to an increase in the number of IPOs and the tech sector’s expansion.

According to its website, Apollo, which opened its Mumbai office in 2008, now manages about $513 billion in assets globally. The company started lending to Indian property developers in 2017. A year later, shadow banks such as IL&FS Investment Managers and Dewan Housing Finance have struggled, causing turmoil in credit markets. Apollo stepped in and increased lending activity. Business took off when financing needs increasing during the pandemic, Sahni said.

He said that the private equity firm plans to hire two more bankers this year to bolster its 12-person team in the Indian real estate unit. “We are interested in continuing to invest and take advantage of the turmoil in India’s financial markets,” said the partner, who said Apollo’s average loan size would be between $40 million and $60 million.