Kotak Realty Fund, a part of Kotak Investment Advisors, the alternative assets arm of Kotak Mahindra Bank, has invested around Rs 300 crore ($50 million) in a residential project of Mumbai-based developer Nirmal Group. The investment is spread across two tranches and the fund will disburse more than half of the committed capital now and the rest will come later.
The fund has invested in an upcoming project of the developer located in the suburban area of Mulund in Mumbai. The project has not been launched yet.
The news was first reported by Mint.
Confirming the development, Vikas Chimakurthy, director, Kotak Realty Fund, told VCCircle, “We always try to reinvest in our investee companies and if our equation goes well, we might increase our exposure to the company.”
The proceeds from the fund will be used to pay off debt raised against the project and for construction.
As first reported by VCCircle, the fund hit final close and wrapped up its offshore fund at $400 million. It scooped up commitments from large sovereign and pension funds that included commitment of $200 million from Abu Dhabi Investment Authority (ADIA). ADIA is one of the two sovereign wealth funds of UAE representing Abu Dhabi and an active investor in India through public market deals. It has previously also backed Red Fort’s offshore realty fund.
This offshore fund aims to deploy Rs 100-400 crore in each deal through debt style transactions. The realty fund will invest in residential projects in metro cities and will chase annual returns of 22 per cent and above.
VCCircle had first reported in November last year that the fund has signed three-four term sheets to invest from the offshore fund.
Founded in 1975 by late SP Jain and now managed by Dharmesh S Jain, who is the managing director of the company, the Nirmal Group is active in suburban areas of Mulund and Thane in Mumbai. It is coming up with three residential projects in Mulund alone.
(Edited by Joby Puthuparampil Johnson)