Instrument design
We build the right structure — mezzanine, NCD, convertible, or a blend — so the cost matches the value it unlocks and the exit actually repays it.
The capital between senior debt and equity.
Structured Finance for Real Estate Developers
When a project needs more than senior lenders will give but you don’t want to dilute equity, structured and mezzanine capital fills the gap. We design the instrument, model the waterfall and place it with the Category-II AIFs mandated for exactly this risk — ₹50–500 Cr, on terms that match the value it unlocks. CA + ex-banker led. ₹4,250 Cr+ facilitated since 2011.
Mezzanine & gap capitalCat-II AIFs₹50–500 Cr
A track record since 2011, in numbers
₹4,250 Cr+
Capital facilitated across sectors₹550 Cr
Largest single facility structured₹50–500 Cr
Typical structured ticket rangeSince 2011
Advising developers & promotersStructured finance is the layer between senior secured debt and promoter equity — mezzanine debt, subordinated NCDs and convertible structures. It is more expensive than a bank loan but far cheaper than giving away equity, and in India it comes mainly from SEBI Category-II AIFs mandated for exactly the risk banks step back from.
Finnova Advisory is an advisory firm — we structure the instrument and negotiate terms; the fund commits and disburses.
The instrument at a glance
What structured real estate capital looks like
Indicative parameters for a mezzanine or structured facility. The exact instrument, pricing and security are designed around the gap it fills and the exit that repays it.
Ticket size~₹50–500 CrProject or portfolio level
Target IRR~mid-teens–low-20sJunior risk, priced for it
StructureNCD / mezzanineCoupon + equity-linked / back-ended
PositionSubordinatedBetween senior debt & equity
Tenor2–4 yearsMatched to the exit event
Used forGap / specialGrowth, acquisition, refinance
Indicative only — not an offer. Structure, pricing and security vary widely with the position in the capital stack, project stage and sponsor. We design the instrument to fit the value it unlocks.
When to use it
Four situations structured capital is built for
Structured finance is not a default funding route — it is a precise tool. These are the situations where it is the right call.
SituationWhat it fundsNotes
Funding gapMost common FundsLTC above senior-debt appetite NotesTop up a bank/HFC facility without diluting equity
Special situations FundsAcquisition, partner buyout, refinance NotesCapital for events senior lenders won’t touch
Growth / portfolio FundsAcross multiple projects NotesPlatform-level capital for a developer’s pipeline
Last-mile / stress FundsStalled or stressed projects NotesOften alongside SWAMIH — see last-mile funding
For stalled or stressed projects specifically, structured AIF capital often works alongside government last-mile funding — see last-mile finance.
Why Finnova
Structuring is the whole game here
Mezzanine deals live or die on the instrument and the inter-creditor terms. Six reasons developers run them through us.
The right funds, now
We know which Category-II AIFs and NBFCs are deploying into your asset class and stage today — not a stale list of names.
Inter-creditor expertise
Sitting structured capital alongside a senior lender needs a clean inter-creditor and security structure. This is the technical heart of the deal, and where we earn our fee.
Returns-waterfall modelling
We model the coupon, equity-linked and back-ended components so both sides see a deal that clears — and you keep your equity.
CA + ex-banker on the file
The people structuring your instrument have sat on both sides of a credit committee and a fund investment committee.
One advisor, whole lifecycle
Structured capital today, refinanced into senior debt as the project de-risks — sequenced under one desk.
Eligibility & documentation
What a structured-finance file needs
Structured capital is underwritten on the cash-flow waterfall, the exit and the security position. Here is what we assemble and pressure-test.
Documents we assemble & pressure-test
- Project / portfolio financial model and returns waterfall
- Existing senior-debt sanction letters and security details
- The funding gap and the use of proceeds
- The exit / repayment event and its evidence
- RERA, title and approvals status
- Last 3 years’ audited financials and SPV structure
- Promoter net worth and track record
- KYC of developer, promoters and authorised signatories
Indicative — exact requirements vary by fund and structure. We tell you precisely what each AIF or NBFC will want before the file goes in.
Good-fit profile
- Ticket size₹50 Cr+
- Clear exitRequired
- Senior debtIn place / planned
- UseGap / special / growth
Just need senior project debt? Start with construction finance. Stalled project? See last-mile funding.
Process
How an engagement runs — our 5-step path
From structuring to commitment, with the instrument designed around your exit from day one.
Gap & exit diligence
3–5 daysWe size the gap, test the exit and model the waterfall — establishing what structure is fundable before any obligation.
Instrument & fund shortlist
2–3 daysWe design the instrument and approach the Category-II AIFs and NBFCs deploying into your asset class and stage.
Pack & submission
7–10 daysAn investment-committee-ready pack and model, pre-empting the questions a fund IC will raise.
Term sheet & inter-creditor
3–6 weeksWe negotiate pricing, security, inter-creditor terms with the senior lender, and the returns structure.
Documentation & drawdown
2–4 weeksDebenture/legal documentation, security creation and disbursement — and we stay on file to refinance into senior debt as the project de-risks.
Consultation
Tell us about the gap
One conversation tells you whether structured capital is the right tool, what it should cost, and which funds will look at it. No pitch — a straight read from people who structure mezzanine deals every week.
Thank you — your enquiry has been submitted
We’ve received your details. A senior member of our team will review them and get back to you within one business day. Everything you’ve shared stays strictly confidential.
FAQ
Structured finance, answered
Structured finance is capital that sits between senior secured debt and promoter equity — mezzanine debt, subordinated NCDs, convertible structures and gap funding. It is used when a project needs more capital than senior lenders will give but the promoter does not want to dilute equity. In India this layer is provided mainly by SEBI-registered Category-II AIFs, typically at ₹50–500 Cr tickets.
When there is a funding gap senior debt won’t cover — a higher loan-to-cost than a bank will lend, a special situation (acquisition, buyout of a partner, refinancing a stressed facility), growth capital across a portfolio, or speed that mainstream lenders can’t match. It is more expensive than senior debt but cheaper than giving away equity, and it can be the difference between a project moving or stalling.
Returns are higher than senior debt because the capital is junior and takes more risk — indicatively in the mid-teens to low-twenties on an IRR basis, often blending a coupon with an equity-linked or back-ended component. Pricing depends on the position in the capital stack, security, the project’s stage and the sponsor. We structure it so the cost is matched to the value it unlocks.
Primarily SEBI-registered Category-II AIFs (real estate credit and special-situations funds), and some NBFCs for mezzanine positions. These funds are mandated for exactly the risk that banks and HFCs step back from. We know which funds are deploying into your asset class and stage right now, and place the file accordingly.
Through a mix of subordinated charges, NCDs or debentures, share pledges, cash-flow waterfalls, and inter-creditor arrangements with the senior lender. Getting the inter-creditor and security structure right is the technical heart of these deals — and where a CA + ex-banker advisor earns its fee.
We are an advisory firm, not a fund. We structure the instrument, model the returns waterfall, run the process across the right Category-II AIFs and NBFCs, and negotiate pricing, security and inter-creditor terms — the fund commits and disburses.
Further reading
Guides on structured capital
Where mezzanine sits, and how the capital pools compare.