Lending to realty cos good option for HNIs: Sandeep Madan

High Net worth Individual (HNI) Investor Sandeep Madan has not been overweight on equities for quite sometime now given the high degree of volatility.

In an interview to CNBC-TV18, he said there is a lucrative opportunity for HNIs in the realty space. "In this difficult market there are more opportunities because money circulation is so tight that it is difficult to raise money. Play the hand with the developer at the equity stage because the banks are not lending to real estate," he said. He suggests investors lending to real estate rather than investing in real estate itself. Also Read: Early polls plus reforms to aid mkt; shun PSBs, realty, says UTI MF Below is the edited transcript of Sandeep Madan’s interview with CNBC-TV18 Q: How have you looked at this rally itself, would you look at it as a good excuse to take profit from your equity assets? A: The way equities have been playing out one has not been overweight on equities for a while now. So, it is not about trading these blips where the Nifty goes down 1000 points in a fortnight and recovers 800 points. That is not the kind of investments I do anyway. It is not as if I made any money in the process or I am losing any. Q: In a market like this where there is no money to be made in equities, there is hardly any money to be made in real estate and now with the way rates are going, fixed income also looks like it is a bleak opportunity, is it better to be just sitting on cash? What could the investment avenues look like for the rest of the year? A: There money is like water. If you just put it in a place and it find cracks then it will just find its way and move through. Money works like that. In this difficult market there are more opportunities because money circulation is so tight that it is difficult to raise money. If you are a proactive investor then there are more opportunities. There are large opportunities in distressed asset space, asset restructuring companies with NPAs rising. One needs right people and right connections to work with. So, opportunities are there, but when we talk about all these things, quite a lot of mess has been created by our own doing. We have had regulators for insurance or equities, telecom, for electricity, but we don’t have one for real estate. Real estate being the largest wealth creator for each and every one of us irrespective of whether it is HNI, medium net worth, low net worth or super high net worth, everybody’s real net worth of 85-90 percent lies in real estate. There has been talk about regulator for real estate since ages, but it is still nowhere in place. Everybody has got a free hand; people have been taking investors for a ride. Q: Are you making any real estate investments now? Do you think opportunities are opportune in any city at this juncture? A: Opportunities always are there and today even the situation is where as investor one gets an opportunity to play the hand with the developer at the equity stage because the banks are not lending to real estate. So you have a play where rather than investing and looking at appreciation, you can invest at the equity stage with the realtor.