TCM Limited signed an MoU to develop a premium villa project in Kalamassery, Ernakulam, through a new joint venture.

The deal brings together three parties, each with a distinct role. TCM Limited will contribute the land.

Asset Homes Private Limited, a real estate development firm, will handle the construction and execution of the project.

Mr Suhas Nandan, an individual investor, will provide the working capital needed to get things moving.

The project is planned on 250 cents of land in Thrikkakara North Village, which works out to roughly 2.5 acres.

To carry out the development, the three parties intend to set up a separate entity called Asset TCM Estates Private Limited.

This will function purely as a special purpose vehicle built for this one project. Mr Nandan’s involvement is structured a little differently from a typical equity investment, and it is worth explaining in some detail.

He will inject at least ₹25 crore into the SPV as working capital, structured as a loan.

This loan carries a 20% annual return, compounded yearly, over a period of three to four years from the date it is disbursed. In return for the investment, he will also subscribe to a 1% stake in the SPV.

Once the loan is fully repaid, he will transfer these shares back to the other partners at face value. Asset Homes will be responsible for the full development cycle.

This covers design and conceptualisation, obtaining the necessary statutory approvals, actual construction, branding and marketing, and finally handing over completed units to buyers.

The three parties are also expected to sign a more detailed Shareholders’ Agreement later, which will lay out board composition, shareholding specifics and how any disputes between the partners would be resolved.

In its filing, TCM confirmed that none of the parties involved in this arrangement are related to each other.

As a result, the transaction does not qualify as a related-party deal under SEBI’s disclosure rules.

The company made this disclosure under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

The MoU currently lays out the broad commercial terms of the partnership, and these will be replaced by definitive, binding agreements once the parties finalise them.

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