Piramal to raise $80M in new slum redevelopment fund

Piramal Fund Management, the real estate investment platform of Piramal Enterprises, is planning to raise a new fund focused on redevelopment of realty projects in Mumbai with a target corpus of Rs 500 crore ($80 million), Mint reported citing a senior executive of the company.

In the first fund–Mumbai Redevelopment Fund–the firm had raised the same corpus of Rs 500 crore in 2013. Under the strategy, it invests in slum redevelopment projects and enters at a later stage after getting consent from slum dwellers.

The first fund has been fully exhausted now and the firm is looking to launch the second edition in the next couple of months. The new fund, to be christened Mumbai Redevelopment Fund II, will expand the focus to invest in society redevelopment projects besides slum redevelopment.

“There is a demand for capital to back redevelopment projects in a land-starved city like Mumbai. Slum redevelopment is critical in a city like Mumbai and if people like us give capital, we assume that more developers will also come in,” the report quoted Khushru Jijina, managing director, Piramal Fund Management.

An email sent to the spokesperson of the company to gather more information on the strategy of the fund did not immediately elicit a response.

On the fundraising side, Piramal recently revived its offshore fund by pruning the target corpus further to $150 million after ceasing the fundraising trail earlier. It has already raised $50 million (around Rs 300 crore) for the fund christened Indiareit Offshore Fund-3.

It provides capital from early stage equity to late stage debt, including construction finance. Currently, Piramal manages/advises funds worth over Rs 7,550 crore on the equity side and has disbursed Rs 3,000 crore as part of proprietary debt loan book.

It has sealed back-to-back deals from its roaster of domestic and offshore funds in the recent past. These include an investment of Rs 200 crore in a project of Bangalore-based Adarsh Developer along with Aditya Birla Real Estate; a Rs 175 crore investment in a project of Gurgaon-based developer ILD and an apartment bulk-buying deal with Mumbai-based developer Omkar Realtors.

(Edited by Joby Puthuparampil Johnson)

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