Realtors are turning to private equity (PE) investors and non-banking financial companies (NBFCs) for money as banks tighten funding for real estate firms in the wake of the recent bribes-for-loans scam. At least three real estate companies are currently engaged in talks with PE investors to support their ongoing projects as banks turned risk-averse after transactions with realtors came under the scanner of regulators and investigating agencies, according to investment bankers. Typically, PE funds invest $50-150 million (Rs.225-675 crore) in realty firms for three-five years and make returns of around 25-30% on exit. “It (the scarcity of loans) has just started. The real shortage will be felt in the next 30-45 days. Given that banks are now hesitant to give new loans, the issue is likely to persist at least in the next two quarters. Real estate companies are now looking at private equity and non-banking firms for funds,” said Arun Kedia, director of marketing at Mumbai-based Garnet Construction Ltd. […]