MUMBAI: Billionaire Ajay Piramal's real estate focused private equity fund Indiareit Fund Advisors, US-based real estate fund Capri Capital Partners and Edelweiss Capital are in the fray to acquire a stake in Mumbai-based realty company Vardhman Developer's two real estate projects.
Mumbai-based Vardhman Developers is developing two projects for Rs 400 crore in South Mumbai and Andheri, a north-western suburb in Mumbai, for which the three funds are competing. Vardhman plans to raise Rs 100 crore through an offering.
Advisory firm Jones Lang LaSalle Meghraj (JLLM) is advising the realty firm, said two people in the know of the development. The premium residential projects are located in Byculla in South Mumbai and in Andheri. The developers are looking for raising debt, one of the two persons said.
"We are a five decade-old company and we have worked on various projects in the metropolis," said Rajesh Vardhan, MD, Vardhman Group. "Funds have expressed interest in our projects due to our record. However, we can not divulge specific details of any project as these are bound by confidentiality agreements."
An email query to JLLM, Capri Capital Partners and EdelweissBSE 1.48 % Capital did not elicit any response. Indiareit spokesperson said: "As per company policy, we do not comment on market speculation."
"Investing in a realty project through a special purpose vehicle is safer than investing in the company itself," said Raja Kaushal, managing director of Gatere, a real estate advisory firm and an alliance partner of BNP ParibasBSE 1.97 % Real Estate. "Since investment in SPV has shown quick and assured returns in the past, quality projects will continue to get funding," Kaushal added.
According to data compiled by venture intelligence, private equity real estate firms made seven investments (amounting to $199 million across five deals with disclosed values) during the quarter ended June 2013.