Pragnya Fund, a Mauritius based private equity fund with target investments in Indian real estate, has made a project-level (SPV) investment in Chennai-based VGN Developers Ltd, which is developing a 6 lakh square feet residential complex. Sources close to the development told VCCircle that the investment has been in the range of Rs 25-Rs 30 crore.

The project located at Paruthipattu on the Poonamalli Avadi High Road (State Highway 55), Chennai will cater to the growing segment of affordable housing. The approvals for the project are in progress and the launch is scheduled for mid-2011.

This will be the second investment by Pragnya Fund in Chennai. The first investment of the Fund was in an 87-acre integrated township at Siruseri, off Old Mahaballipuram Road (OMR).

VGN Developers, which has been in operation since 1942, have developed major residential layouts and apartments across Chennai with a total built space of over 20 million sq. ft. Some of the major projects include VGN Zodiac Ville, VGN La Parisien, VGN Minerva, VGN Platina, VGN Ferndale, VGN Pinnacle and VGN Brixton.

Pragnya Fund has been sponsored by Subba Rao Dukkipati and Gopal Menon, two professionals with a background in the global financial services industry. It has till date invested in seven realty projects in India and Sri Lanka to deliver a total built up space of about 12 million square feet.

The fund’s current investments include L&T Eden Park, an 87-acre integrated township being developed in partnership with Larsen & Toubro in Chennai, L&T Tech Park - an IT SEZ project in Kochi, a mixed-use project in Colombo and two residential projects at Asansol and Barrackpore in West Bengal.  It is also investing in a project in Bangalore which is currently in the pipeline.

With these investments, Pragnya has completely deployed its first fund and is currently in the process of raising its second fund – Pragnya Fund II. While availing opportunities in various cities, the fund tends to have a focus on Indian cities in south and West Bengal where it seeks first-mover advantage and also ensures that risks are neutralised by non-speculative land acquisition costs.

A few private equity deals that were struck this year include Evolvence Capital India, New York Life Investment Management India Fund II investing in Emaar MGF Land Ltd; IL&FS Milestone Fund II putting $122.7 million into HCC Real Estate Ltd; GIC Special Investments Pte Ltd. , Temasek Holdings Advisors India Pvt. Ltd, HDFC Venture Capital Ltd, Abu Dhabi Investment Council infusing $107 million into Lodha Group; TPG Capital putting $100 million into Shriram Properties among others.

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