Aditya Birla Realty Fund underwrites 75 Ozone apartments; realtor raising $130M more

Bangalore-based real estate developer Ozone Group has raised Rs 145 crore ($21 million) from Aditya Birla Real Estate Fund through apartment bulk-buying route, a top company executive told VCCircle.

The fund has underwritten 75 apartments in an ongoing mixed-use project called The Metrozone located in Anna Nagar in Chennai. A substantial part of the proceeds will go in paying off debt from HDFC and the rest will be used for the project.

“The rationale behind sealing bulk-buying deals for us is to bring down debt and therefore increase operational efficiency of the company. The fund has released Rs 120 crore so far, of which Rs 100 crore will go towards loan repayment,” said Srinivasan Gopalan, chief executive officer, Ozone Group.

Spread across 40 acres, Metrozone is a mixed use project that offers 29 towers of 2,3,4 and 5 B/R apartments and penthouses. The project has a retail element containing a mall, food courts and multiplex.

This is the second bulk-buying deal of the realtor in the project. It had raised Rs 175 crore through this route last year. This was labelled as the first deal of Blackstone in the residential space, as the world's largest alternative assets manager has largely been focusing on commercial assets in India.

Meanwhile, Ozone is raising a total of Rs 900 crore ($130 million) across two projects from global and domestic financial institutions. It is raising funds through equity route for a yet-to-be launched project and through structured debt for an ongoing project.

“If all goes well, we will be able to wrap up this fundraising in the next two months,” Gopalan added.

The realtor offers projects across residential, hospitality, commercial & SEZ and retail and has developments at various stages of construction in Bangalore, Chennai and Goa.

Aditya Birla Realty Fund recently invested Rs 207 crore along with Piramal Fund in a project related special purpose vehicle (SPV) of Bangalore-based realtor Adarsh Developers. The fund also recently sealed a deal with Barath Building Construction Pvt Ltd where it invested Rs 50 crore.

Headed by Apurva Muthalia who joined the firm late in 2012 from IL&FS Private Equity, the fund is currently managing a corpus of Rs 1,100 crore and has prepared the blueprint for its next fund.

The real estate fund is part of the Aditya Birla Financial Services Group which in turn is part of Aditya Birla Nuvo Ltd. It is, however, separate from Aditya Birla PE which operates two sector agnostic PE funds.

(Edited by Joby Puthuparampil Johnson)

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