Mumbai: Motilal Oswal Real Estate (MORE), the real estate arm of financial services provider Motilal Oswal, on Monday said it has raised ₹ 575 crore for its latest fund India Realty Excellence Fund IV by its first close.
The money will be used to develop affordable residential real estate in India’s top six cities, while a smaller amount will selectively be invested in commercial projects. MORE currently has investments in Mumbai, Delhi-NCR, Bengaluru, Chennai, Hyderabad and Pune.
The fund will focus on early-stage structured equity or debt investments with established developers and undertake 12-15 transactions of ₹ 80-150 crore each, MORE said in a statement.
About 80% of the funds will be used for housing, while the remaining will be used for commercial activity, Sharad Mittal, director and CEO of MORE said in a phone interview.
Set up as an alternative investment fund (AIF category II), the money was raised from high net-worth individuals and family offices.
“The impact of government policies like Pradhan Mantri Aawas Yojna and introduction of a regulator (RERA) is gradually playing out across all major cities of India, indicating early signs of a recovery in residential real estate," said Mittal.
He added that the company plans to make its first investment from the fourth fund this month.
MORE, founded in 2008, currently has three real estate funds in India with ₹ 2,100 crore of assets under its management.
Its second fund, IREF II, which made its final close in 2015, had made 14 investments and secured seven exits. It has returned 82% of the fund corpus back to its investors. Its third fund, which made its final close last year, has made 15 investments and secured two exits, returning 25% of funds back to investors. Mittal said while the latest round will last around 18 months, the company will look for its second close by December this year.
Vishal Tulsyan, CEO of Motilal Oswal Private Equity (MOPE), the holding company of the real estate firm, said “We have scaled up the real estate private equity business by more than 10 times in the past five years. We are very positive on this sector and investing in this segment shall continue to be our focus in the coming years".