Mumbai-based developer Sunteck Realty Ltd has bought back Kotak Realty Fund's stake in its 23-acre Sunteck City mixed-use project in the city's Goregaon suburb.
The company said in a press release that the private equity realty fund had invested Rs 150 crore in 2012 at the time of acquiring a 16-acre land parcel that is part of the project. It didn’t disclose the transaction value but said the deal provided an internal rate of return of around 22 per cent over a period of a little less than four years. Separately, the Press Trust of India reported, citing a Sunteck statement, that the deal value was Rs 270 crore.
Kamal Khetan, chairman and managing director at Sunteck Realty, said the company has grown with a good mix of debt and equity in the past that has helped it keep debt levels low and optimise the cost of funding. “We have been able to monetise our assets faster and provide exits to partners through excess cash flows, thus generating attractive return on investment for ourselves and partners,” he said.
S Sriniwasan, CEO at Kotak Realty, said the fund invested at an early stage in the project and exited “in a timely manner with good returns”.
The company provided exit to Kotak Realty in multiple tranches through internal accruals and surplus cash flows for the project’s first two phases. The project entails total six million sq ft development with residential and commercial spaces along with retail and entertainment.
Separately, Kotak PE owns a 6.5 per cent stake in Mumbai-listed Sunteck Realty.
Kotak Realty Fund has made three investments in Sunteck Realty since 2007-08, which includes an investment in the company itself. Of these, the fund has exited its investment in one of Sunteck Realty's luxury projects, Signia Isles in Bandra-Kurla Complex, with 23 per cent returns.
In other transactions, the fund recently exited in a deal worth Rs 165 crore from a housing project of Delhi-based builder TDI. In April last year, it had exited its almost three-year-old investment in a proposed township project of North India-based developer Parsvnath with 25 per cent returns.