Motilal Oswal's PE arm exits Kolte Patil Developers with 23 % IRR

MORE had invested Rs 58 crore through its funds IREF II and IREF III in December 2015 by taking an equity stake in a project

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, has exited from its investment in a project being developed by Kolte Patil Developers in Pune. 

MORE had invested Rs 58 crore through its funds IREF II and IREF III in December 2015 by taking an equity stake in the project and has now exited with an IRR of more than 23 per cent.

Kolte Patil is a real estate developer having operations in Pune, Mumbai and Bangalore markets. The investment was made through two funds  - India Realty Excellence Fund II (IREF II) and India Realty Excellence Fund III (IREF III) -  in a project called City Avenue, which is adjacent to the Kolte Patil project Western Avenue in Wakad, Pune.

City Avenue is spread across 2.8 lakh sq ft and comprises one residential and one commercial tower. The construction for the project commenced in 2016 and within just three years, the residential portion was fully sold and delivered with OC. Work on the commercial portion is underway.

IREF II is the second fund launched by MORE and achieved its final close in April 2015 at Rs 500 crore. Till date the fund has made 14 investments and has secured 10 exits at an average IRR of 21.4 per cent.

The fund has returned 129 per cent of fund corpus within four years from its final close. The fund has another 30% capital invested across its remaining four investments which would be divested over the next one year.

IREF III is the third fund launched by MORE. It achieved its final close in August 2017 at Rs 1,000 crore and has till date made 22 investments. The fund has secured 6 exits at an average IRR of 22.4% and has returned 26% of fund corpus within a period of two years from its final close.

IREF IV, the fourth fund launched by MORE, recently achieved its third close at Rs 1,050 crore. The fund has made 6 investments till date.

At a time when fresh disbursements by NBFCs and HFCs have slowed down considerably, MORE has been actively assessing new propositions. In the last three-four months, MORE has committed Rs 280 crore across four investments through its funds IREF III and IREF IV.

This amount has been committed across projects with developers like Casagrand Group (in its residential projects in Chennai and Bangalore) and with Phoenix Group in its project in Hyderabad. The ticket size for each of these investments is between Rs 50-80 crore.

"We have recently announced the third close of our fourth fund IREF IV at Rs 1,050 crore and we are looking to achieve final close in the next 2 months,” said Sharad Mittal, CEO, Motilal Oswal Real Estate.