Paradigm Realty repays Rs 175-crore debt to Edelweiss two quarters early on strong sales, refinancing

Mumbai-based real estate firm Paradigm Realty has announced that it has pre-paid a debt of Rs 175 crore to non-banking financial services firm Edelweiss Financial Services Ltd, two quarters early. The developer had raised the debt, which carried an interest rate of 13 percent, two years ago to fund the construction of the residential phase of the 10-acre 102 Downtown development, as part of a joint development with listed developer Prozone Realty Ltd.

According to a release, Edelweiss' internal rate of return for the debt instrument was in the range of 18-19 percent, with the debt including quarterly coupon payments that started from the third quarter after the initial funding. Paradigm said that the early exit to Edelweiss was made possible due to strong sales collections at 102 Downtown, as well as a refinancing exercise, in which the company raised Rs 135 crore in debt from a leading private lender.

"The early exit provided to Edelweiss Financial Services is a demonstration of our commitment to financial discipline and operational excellence. Their support played a pivotal role in expediting the delivery of the first phase of 102 Downtown comprising of 600 apartments," said Parthh K Mehta, chairman and managing director of Paradigm Realty.

For the new funding facility of Rs 135 crore, Paradigm said that while it carries an interest rate of 13 percent, it can be reduced by one percentage point on the achievement of certain performance milestones. The new funding will also be used for project expenditures, besides providing an early exit to Edelweiss.