IL&FS invests $39m in Indian real estate project

The company, owned by local conglomerate Indiabulls, is working on the 8.3-acre project at Worli in south central Mumbai. IIML's investment - channeled via its second realty fund, which raised $895 million in 2008 - values the development at INR21.3 billion. This gives the land a premium of more than 35% above the INR15.8 billion price at which Indiabulls bought it in August 2010.

"The project is a unique asset for us in terms of size and location and will fetch superior returns for us and our new partner," said Vipul Bansal, chief executive officer of Indiabulls Real Estate (IBREL), told The Economic Times.

Analysts have been intrigued by the transaction, as IBREL, which has a reputation for buying high-value city centre land via auctions, seldom raises private equity funding for its projects.

News of this round comes after IIML recently commented that the $900 million it is looking to raise across its three funds will take longer than usual as a result of tighter risk assessment among investors globally. The investor currently has three vehicles in the market: growth equity fund Tara India Fund IV, a rental yield fund, and PIPE fund, each of which is targeting $250-300 million.

Archana Hingorani, CEO and executive director of the private equity firm, said that it is likely to take 12-18 months to raise a fund compared to 9-12 months previously. IIML's merger last year with real estate private equity specialist Saffron Assets Advisors might help reduce the fund-raising cycle however.

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• Topics
• South Asia
• Real estate
• Real estate
• Growth capital
• Real estate
• India