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The new fund would focus on structured debt investments with established developers and undertake 12-15 transactions of  ₹50-80 crore each (Photo: Bloomberg)
The new fund would focus on structured debt investments with established developers and undertake 12-15 transactions of 50-80 crore each (Photo: Bloomberg)

Motilal Oswal Real Estate plans to raise up to 800 cr for 5th realty fund

Private equity firm Motilal Oswal Real Estate today said it will raise up to 800 crore for its fifth fund to provide construction finance to realty projects across seven major cities

NEW DELHI : Private equity firm Motilal Oswal Real Estate (MORE) on Wednesday said it will raise up to 800 crore for its fifth fund to provide construction finance to realty projects across seven major cities.

In a video press conference, MORE Director and CEO Sharad Mittal said the fund would invest mainly in mid-incoming housing projects across seven cities --- Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, and Ahmedabad.

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MORE is looking to raise up to 800 crore through its recently launched fifth real estate fund 'India Realty Excellence Fund V (IREF V)', he said, adding that the new fund will focus on construction finance in post-approval projects.

MORE has invested capital in the real estate sector through four real estate funds and PMS/NCD investments.

The cumulative asset under management under MORE stands at more than 3,700 crore.

The new fund would focus on structured debt investments with established developers and undertake 12-15 transactions of 50-80 crore each.

The fund has been set up as an alternate investment fund (AIF Category II) registered with stock market regulator SEBI.

MORE expects to achieve the first close by March 2021 and conclude fundraising in the next 6-9 months.

MORE is part of Motilal Oswal Private Equity (MOPE), the alternative investment platform of Motilal Oswal Financial Services Limited. The cumulative AUM under MOPE is more than 7,000 crore.

Vishal Tulsyan, Managing Director and Chief Executive officer, MOPE said, "Our real estate private equity business has scaled up over the last decade. We believe that the sector is undergoing a structural shift and is at the cusp of a transformation."

"The last few years have been challenging for the industry, which has been grappling with a prolonged slump due to the impact of regulatory reforms and the liquidity crisis created by IL&FS starting in September 2018.

"With NBFCs putting brakes on new lending and banks becoming selective, there has been a huge gap in construction finance available in the sector over the last two years," Mittal said.

MORE had earlier invested in Casagrand Group, ATS Group, Shriram Properties, Kolte-Patil Developers.

With the launch of this fund, MORE said it would provide a full financial solution to their developer partners. The early-stage financing through their earlier funds and post-approval stage/construction financing through this new fund.

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