Private equity funds responsible for carrying out due diligence on developers and regulating projects at different levels will now have a larger task cut out for them once RERA guidelines come into the market. They will have to ensure that developers comply with the RERA norms and that all additional disclosures are in place before a new project gets launched.
This will weed out seasonal developers in the market, letting serious players remain. Corporate governance required by PE funds, earlier a contractual requirement, will now be a legal requirement under RERA, says Anuranjan Mohnot, managing director, Amplus Capital Advisors Pvt Ltd.
PE funds are also getting into last mile funding projects in which buildings are 60% complete. Some developers have in the past utilised proceeds of sales to acquire new land banks and are now stuck and require funding to complete these projects. Delhi is one market where many developers have failed in executing their projects, hence many realty players from south India and west India are planning to enter the north Indian market, he says.
The recently launched Amplus Realty Fund - II focuses on early-stage equity investments in mid-sized residential real estate projects with a ticket size of Rs 20-40 crore per transaction. It is now looking to partner with premium developers in Bengaluru, Pune, Chennai, Mumbai, Ahmedabad, and Delhi-NCR.