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Omkar Realtors and Developers Ltd is in talks with private equity (PE) investors to raise as much as 200 crore in the next couple of months for its Dhobi Ghat project in Mumbai, a top company executive has said.

The century-old Dhobi Ghat is an open-air laundry area spread across nearly seven acres next to South Mumbai’s Mahalaxmi race course and the local railway station. Under the plan, Omkar will rehabilitate the slum dwellers and tenants in the locality and develop commercial property in its place. The heritage washing area will be retained as it is.

At present, Mahalaxmi’s real estate is reported to cost around 40,000 per sq.ft.

“We have taken a new project at Dhobi Ghat. So, we are talking to a few private equity investors for raising funds. We intend to raise between 150 crore and 200 crore for the project," said Gaurav Gupta, director, Omkar Realtors and Developers.

The deal is likely to close in the next one or two months.

Gupta, however, declined to reveal names of the PE firms the company is in talks with, citing confidentiality reasons.

Dhobi Ghat is home to around 7,000 slum dwellers. The project aims to rehabilitate around 1,116 families along with 50 commercial tenants.

According to a person close to the development, Piramal Fund Management, which has a long relationship with the developer, is a front runner to invest in the project.

Earlier this year, Omkar Realtors and Developers had raised about 1,200 crore from Piramal Fund to finance its super-luxury residential project Omkar 1973 at Mumbai’s upmarket Worli neighbourhood.

A Mint report on 30 March said the deal—one of the largest single-project financing transactions in India—came at a time when developers were finding it difficult to sell luxury residential projects.

Despite a subdued demand for residential properties, private equity investments in India’s real estate companies rose 85% in January-March 2015 from the year-ago period, according to a report by property consultant Cushman and Wakefield.

According to the report, private equity firms invested 5,168 crore in real estate firms during the period, up from 2,800 crore a year ago.

Gupta said the construction at Dhobi Ghat will start in the next six months, adding that some of the slum dwellers have already moved out.

“We received the letter of intent to redevelop the area in the last week of April. We have started the paperwork for construction. Relocation of around 200 slum dwellers has also started," Gupta said.

The Economic Times on 16 April had reported that the property developer had obtained the mandatory majority consent of eligible tenants for the redevelopment project, which has been pending for 10 years.

Last year, Bombay high court had ordered the Maharashtra government to invite fresh bids for the project, after the residents rejected plans by another Mumbai-based developer.

According to The Economic Times report, around 75% of the eligible slum dwellers permitted Omkar Realtors Projects Pvt. Ltd, an unlisted arm of the property developer, to redevelop the area in a secret ballot conducted by the Slum Rehabilitation Authority (SRA).

According to real estate consultants, the project will enhance the perception of the location, though it is too early to predict the kind of impact it will have on property prices around the area.

“Any slum rehabilitation project changes the landscape of the area significantly. If the project shapes up well, it will definitely give a boost to the location," said Ashutosh Limaye, head of research with real estate investment management firm Jones Lang LaSalle (JLL).

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