A real estate fund, managed by India’s largest private equity firm IL&FS Investment Managers, is investing Rs 100 crore in the construction contract business of Mumbai-based SRM Sites Pvt Ltd, a subsidiary of Shree Ram Urban Infrastructure Ltd. The PE fund had earlier invested Rs 155 crore in SRM Sites in two different tranches.
Shree Ram Urban Infrastructure is currently developing a multi-storey residential building called Palais Royale at Worli (Mumbai) and SRM Sites has undertaken a construction contract for part of the multi-storey development. The building will have an approximate developable area of 3.9 million sq. ft.
J. Sagar Associates was the advisor to IL&FS Investment Managers on the deal.
An e-mail query sent to IL&FS spokesperson did not get any response at the time of filing this article.
Palais Royale, estimated to be anywhere between 75 storeys and 90 storeys, was once considered to be the tallest building in Mumbai. However, real estate firm Lodha Developers has already announced a 117-storey residential tower and the project has raised Rs 500 crore from the likes of HDFC Realty Funds and Temasek. Palais Royale is being built on the erstwhile Shree Ram Mills land at Worli and will be LEED Platinum certified.
Shree Ram Urban Infrastructure scrip closed at Rs 132.9, down 1.74 per cent in a Mumbai market up 0.41 per cent.
For the nine-month period ending September 2011, Shree Ram Urban Infrastructure reported Rs 325 crore in total sales with a gross profit of Rs 5.47 crore. Out of the total sales, Rs 303.3 crore came from real estate while the rest came from textiles.
IL&FS realty funds have invested in projects like Mumbai-based Ackruti City, Gurgaon’s Ansal SEZ Projects and Bangalore’s QVC Realty, among others. It is currently investing from $895 million IL&FS India Realty Fund II, which has already deployed $700 million across 24 deals. Incidentally, IL&FS India Realty Fund II had raised $525 million in 2006.