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Business News/ Companies / News/  Indiabulls’ realty fund invests Rs100 crore in Vatika housing project
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Indiabulls’ realty fund invests Rs100 crore in Vatika housing project

Capital raised as last-mile funding for the project, part of the realty firm's ongoing 700-acre township called Vatika India Next

Vatika Group said the investment has been made in a section of the township, which will have around 400 apartments in high-rises across 10 acres, where the homes are priced at Rs1 crore and above.Premium
Vatika Group said the investment has been made in a section of the township, which will have around 400 apartments in high-rises across 10 acres, where the homes are priced at Rs1 crore and above.

Indiabulls Real Estate Fund (IREF) has invested 100 crore in a Gurgaon housing project of Vatika Group in the fund’s first investment, company executives said.

IREF is the first of the several real estate-focused fund schemes managed by Indiabulls Asset Management Co. Ltd.

The fund, which will primarily do debt transactions, has subscribed to fully-secured, listed non-convertible debentures (NCD) issued by a subsidiary of Vatika Ltd.

The capital has been raised as last-mile funding for the project, which is part of the realty firm’s ongoing 700-acre township called Vatika India Next.

“We have started with an investment in NCR (National Capital Region), and are also exploring deals in Mumbai, Pune, Bengaluru and Chennai," said Ambar Maheshwari, chief executive, private equity funds, Indiabulls Asset Management Co. Ltd.

Confirming the transaction, Anil Bhalla, chairman, Vatika Group, said the investment has been made in a section of the township, which will have around 400 apartments in high-rises across 10 acres, where the homes are priced at 1 crore and above.

Since its launch a few months back, IREF has received commitments of 300 crore from investors, including large family offices, high networth individuals and its sponsor Indiabulls Housing Finance Ltd. It plans to raise a total of 500 crore with a greenshoe option of 500 crore through the alternate investment fund (AIF) route. When a firm exercises a greenshoe option, it means it retains the funds it received beyond its target.

The high-risk, high-return AIFs invest in a wide range of sectors, including real estate, infrastructure and credit derivatives, among others. They are not allowed to accept investments below 1 crore, making them wealthy investors’ clubs.

“We will finish raising 500 crore in the next few months, and then exercise part of the greenshoe option as well," said Maheshwari. Last year, Indiabulls Group said it is venturing into the private equity fund business with a focus on real estate. The fund’s investment strategy is to back under-construction, residential projects in geographies with proven market depth, high pent-up demand and in projects with low execution risks.

There is a slew of real estate funds trying to raise capital, though fundraising is still taking time and investors are not fully confident of the India real estate story mainly due to a prolonged downturn, said property consultants.

According to Mint research, private equity (PE) funds aim to collect around $1.5 billion in the first six months this year.

“There is a huge amount of liquidity in the real estate sector today. Not just domestic funds but also a large number of global funds are waiting to deploy capital," said Rajeev Bairathi, executive director (capital transaction group and north India) at property advisory Knight Frank India.

Bairathi said while the fund-raising process remains tough, deploying capital is equally challenging, and funds are taking their time to find the right deal at the right price.

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Published: 02 Jun 2015, 12:43 AM IST
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