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Indiabulls AIF invests $16M in Vatika’s residential project, raises $47M for debut fund

02 June, 2015

Indiabulls Asset Management Company has received commitment of Rs 300 crore ($47 million) for its maiden realty fund – Indiabulls Real Estate Fund (IREF) – and sealed its debut deal with North-based real estate developer Vatika Group, the company said on Tuesday.

IREF, which has a target corpus of Rs 1,000 crore, including a green-shoe option of Rs 500 crore, has received the commitment within three months since its launch in February, 2015. The commitment has come from high net worth individuals, family offices and institutional investors.

“The fund is expected to draw down another Rs 200 crore shortly. The target corpus of Rs 500 crore (with a green-shoe option of another Rs 500 crore) is expected to be fully raised over the next three to four months,” said Ambar Maheshwari, chief executive officer – private equity funds, Indiabulls Asset management.

Indiabulls Asset Management is a new alternate investment platform focused on realty sector. It is part of Indiabulls Housing Finance.

Meanwhile, the firm’s maiden fund has invested Rs 100 crore ($15.7 million) in an under-construction residential project of the developer. It has subscribed to fully secured, listed non-convertible debentures (NCDs) issued by one of the step-down subsidiaries of Vatika Ltd.

The mandate of the fund is to invest in secured and listed debentures issued by real estate developers. Its focus is to invest in under-construction residential projects, primarily in geographies with proven market depth, high pent-up demand, and in projects with low execution risks.

Its target geographies are Mumbai Metropolitan Region (MMR), Delhi National Capital Region (NCR), Pune, Bangalore and Chennai.

Akshay Gupta, group executive head and chief executive officer – Indiabulls Asset Management Company, said, “We have received an encouraging response to our first real estate fund offering, and our endeavor is to select the highest quality assets in a timely manner.”

Indiabulls is simultaneously also working on an offshore fund which will scoop up Rs 1,000 crore including a green-shoe option of Rs 500 crore.

Clubbed with other proposed funds in the short-medium term, the company aims to have assets under management (AUM) of $1 billion in three-four years.

For Vatika, this comes as another back-to-back transaction having raised money from marquee investors of late. Recently, it inked two joint venture agreements with Singapore’s sovereign wealth fund GIC for two township projects in NCR. Immediately after that, it raised Rs 225 crore from an investment arm of global financial services giant Goldman Sachs for its hospitality arm Vatika Hotels.

In a recent interaction with VCCircle, Vineet Taing, president, Vatika Group, had said the current focus of the company is to raise funds from private equity firms.

Vatika is engaged in developing corporate offices, residential complexes, resorts, five star hotels, restaurants, business centres and fitness outfits. It is largely restricted to the north and specifically Delhi NCR.

Amid a slowdown in real estate, NCR has been worst affected on both counts – sales activity and inventory pressure. Cash flow crunch has forced developers to look at various avenues of fundraise.


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Indiabulls AIF invests $16M in Vatika’s residential project, raises $47M for debut fund

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