Motilal Oswal Group’s real estate private equity arm has invested Rs 300 crore ($42 million) in projects of Chennai-based Casagrand Group, Pune’s Mont Vert Developers, and SD Corp, which is a Mumbai joint venture of Shapoorji Pallonji and Dilip Thacker Group.
Motilal Oswal Real Estate (MORE) has invested from its third and fourth funds -- India Realty Excellence Fund-III and IREF-IV – in the affordable and mid-income housing projects. The deals mark MORE’s first transaction with SD Corp and Mont Vert Developers.
The investments come at a time of a liquidity crunch in the real estate market.
MORE chief executive Sharad Mittal said, “Due to the tightening liquidity in the money market, fresh disbursements to developers have slowed down considerably. While this has increased our deal flow over the past two months, we are being cautious and selective in our investments. Our exits over the past 18 months are a result of this cautious approach.”
He added that the firm believes that as the non-banking financial companies and housing finance companies improve their asset-liability mismatches, the liquidity scenario will become better and the realty sector will receive the much-needed funding. He said, “During such time, we will continue to focus on our philosophy of partnering with trusted developers in top six cities and investing in their affordable/mid-income housing projects through different structures (equity/mezzanine) by providing capital at the right stage and conducting regular monitoring of the projects.”
MORE is currently managing four real estate funds -- IREF, IREF-II, IREF-III and IREF-IV -- along with proprietary investments. MORE’s assets under management stand at more than Rs 2,800 crore.
Funds managed by MORE have been on a spree of profitable exits in the last 18 months. MORE has secured eight exits worth Rs 750 crore through its various funds over the last 18 months.
IREF-III, the third fund launched by MORE, achieved its final close in August 2017 at Rs 1,031 crore and has till date made 17 investments (including re-investments). The fund has till date secured three complete exits at 22.1% average internal rate of return in rupee terms.
IREF-IV, with fundraising target of Rs 1,500 crore, achieved its first close at Rs 575 crore. The fund has made one investment till date.