|
| ICICI Venture plans Rs 1,000 cr real estate fund this month |
| Raghavendra Kamath / Mumbai May 06, 2010, 00:07 IST |
|
To invest in top five to seven cities; offshore fund in the works.
ICICI Venture, the venture capital firm promoted by ICICI Bank, plans to launch a Rs 1,000-crore domestic real estate fund by the end of this month to invest in residential projects in the country, according to sources in the know.
ICICI Venture plans to close the fund in 6-12 months and invest in top five-seven cities. It was also looking to launch an offshore fund by the end of this year, said sources.
Sanjeev Dasgupta, president, real estate, ICICI Venture, confirmed the development but said the company was yet to decide the exact amount to be raised. ICICI Venture has $550 million (over Rs 2,500 crore) under management in domestic and offshore real estate funds.
“It is difficult to raise money for a real estate fund in international markets now as investors are very cautious about investing in the sector. Domestic funds offer a lot of flexibility in terms of investments as they are not governed by FDI (foreign direct investment) norms,” Dasgupta said.
With its latest fund, ICICI Venture will join a long list of fund managers and developers that are launching domestic funds. Fund houses such as Ajay Piramal group-promoted Indiareit, Aditya Birla Financial Services, Motilal Oswal and developers such as Unitech and Ackruti City are either planning or have launched property funds worth a total of Rs 7,500 crore.
Dasgupta said a number of projects which were not FDI-compliant were available at attractive rates now. Norms stipulate that for FDI, real estate projects should have a minimum built-up area of 50,000 sq mt, besides a minimum capitalisation of $10 million for fully-owned subsidiaries and $5 million in case of joint ventures.
In fact, ICICI Venture had plans to launch an offshore fund of $1-1.5 billion but could not go ahead due to the slowdown in the realty sector. Also, its key employees, including managing director Renuka Ramanathan, quit last April.
“We were planning to raise a public fund listed on exchanges. But the markets corrected so badly that we could not go ahead,” he said.
However, it is not taking chances this time and has decided to scale down the ticket size of investments from the domestic fund to Rs 50-100 crore from Rs 300-400 crore earlier and reduced the life of funds from seven-eight years to five years. This is to return the capital to investors as early as possible.
“We want to invest in smaller projects as exits there can be faster,” said Dasgupta.
On plans to launch an offshore fund by the end of the year, he said, “Right now, we are gauging investor appetite. More visibility will come in the next two-three months.”
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
