India Infoline Venture Capital Fund, the private equity arm of the India Infoline group (IIFL), has completed raising a Rs 500 crore fund dubbed IIFL Real Estate Fund (Domestic) Series I, according to a company statement.
The fund will mainly focus on the Indian real estate sector and invest in equity, debt and equity-linked instruments of promising real estate and construction companies, which are either involved in projects/ventures or have significant growth potential.
“We will target deployment (of the fund) during the current year itself, focusing on leading and promising projects of top developers in major cities, which are ongoing or to be launched,” said Balaji Raghavan, CEO and CIO of IIFL Alternate Asset Advisors Ltd.
Last week, Red Fort Capital, a private equity real estate fund, raised $500 million from overseas investors for its second real estate fund focused on residential properties.
The last major fund in the real estate sector came when IL&FS Investment Managers Ltd raised $895 million for IL&FS India Realty Fund II, exceeding the target of $750 million. IL&FS India Realty Fund II, which was closed in December 2008, was the largest sector-dedicated fund followed by HDFC’s $800 million HIREF International.
Post-Lehman crisis, PE investments in real estate sector have taken a hit with overseas investors staying on the sidelines. Most of the fundraising has focused on domestic investors, typically HNIs and ultra-HNIs. Residential realty space has dominated the deal volume during the recovery while commercial real estate deals picked up in value in 2011.
