Indiabulls Asset Management Co Ltd (IBAMC) is launching a real estate fund with a targeted fund size of ₹500 crore with an additional option of raising an equivalent amount.
The company plans to mop up more than ₹10,000 crore in the coming five years under the real estate fund category from both onshore and offshore markets.
In a release filed with the stock exchanges, the fund said it was entering the Alternative Investment Fund (AIF) space by launching the Indiabulls Real Estate Fund, which has been rated ` AAA (AIF)’ by CARE Ratings. The funds raised would be invested in geographies “with proven market depth, high inherent demand, pricing stability and projects with low execution risk”, the statement said.
IBAMC said the targeted size of the fund was ₹500 crore with an additional option of raising an equivalent sum (₹500 crore). The average deal tenure would be three years. The focus was to benefit from growth opportunities through primary, secondary and co-investment opportunities and would be structured as fully secured Non-Convertible Debentures (NCDs) with an exit strategy and returns on a quarterly basis, apart from potential upside. The fund’s sponsor is Indiabulls Housing Finance Ltd.
Akshay Gupta, IBAMC Group Executive Head and CEO, said the IBAMC would emerge as `one of the key players’ in the real estate fund business. The company has planned to mobilise over ₹10,000 crore under the real-estate fund category in the next five years from offshore and onshore markets.
Ambar Maheshwari, CEO-Private Equity Fund of the company, felt that the announcement of an interest rate cut will lead to a revival in housing demand. The various steps taken by the Government such as relaxation of FDI norms in the construction sector and Ordinance on the Land Acquisition Act have the “potential to spur new project developments” in the real estate space. (Maheshwari was earlier MD of Corporate Finance at realty consultant Jones Lang LaSalle).
AIFs were established or incorporated to pool in capital from Indian and foreign investors and the market regulator SEBI has granted registrations to over 100 such funds since May 2012 when the AIF regulations were notified, according to the release.