Ajay Piramal-controlled real estate private equity fund Indiareit will raise close to $750 million overseas to invest in the real estate sector.
The company is managing a real estate fund with a corpus of Rs 1,300 crore. Global private equity firms have already committed over $3 billion worth of investments in the Indian real estate space.
“This will be our second overseas fund raising. We are going to raise about $500 million and will have a greenshoe option of $200-250 million,” Ramesh Jogani, managing director and chief executive officer, Indiareit Fund Advisors, said.
The company is in talks with institutional investors, and private equity players to raise funds. Indiareit had roped in British private equity firm 3i for its first round of offshore fund raising. 3i had invested $40 million in Indiareit’s first $200 million overseas fund.
“The investments will be done over four years. So far, our investments yields are at 300 per cent,” he said. Piramal Enterprises set up Indiareit in March 2006. The company has launched another domestic fund of Rs 350 crore with a greenshoe option of another Rs 350 crore.
Indiareit has so far invested in Mumbai, Bangalore, Hyderabad and Chennai.
Real estate and infrastructure development sector accounts for about one-third of all private equity funding that has come to India during the first half of 2007. Some of the big deals in the real estate sector this year include Avenue Capital’s acquisition of 26 per cent stake in SKIL Infrastructure for $500 million, DE Shaw’s $400 million investment in DLF Assets, IL&FS’ $100 million in QVC Realty and others.