Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, said on Tuesday that it has made Rs 525 crore ($75million) of exits across seven investments through its funds India Realty Excellence Fund II and India Realty Excellence Fund III.
These seven exits have been made in projects of developers like Casagrand Builders (Chennai), ATS Group (NCR), Shriram Properties (Bengaluru) and Rajesh Lifespaces (Mumbai) with an average internal rate of return (IRR) of 21%, the company said in a statement. These exits were clocked since March 2018.
The latest exit has been from a residential project being developed by Casagrand Builders in Karapakkam, Chennai at an IRR of 21.8%, it added.
The cumulative assets under management (AUM) under MORE stands at approximately $465 million (INR 3,200 crore) across four real estate funds and portfolio management services/prop investments.
The realty investment platform has so far made 50 investments and exited 27 investments.
Sharad Mittal, director and chief executive officer at MORE, said the firm’s strategy has always been to partner with trusted developers in top 6 cities and invest in their affordable projects through different structures (equity/ mezzanine) by providing capital at the right stage.”
“Currently, we aim to deploy capital in the top metro cities and prefer to remain light on investments in Mumbai and Delhi NCR. The sector is currently going through a challenging phase; however, we believe that the next cycle of growth in the sector would be led by affordable housing,” he added.
The sector has been grappling for liquidity after the IL&FS crisis. Fresh disbursements by NBFCs and HFCs have slowed down considerably and refinancing of projects has been tough.
The company said the exits lend credence to its investment strategy and robust underwriting, including asset management process.
Mittal said that the firm is looking at making 2 more exits in the next couple of months from its second fund IREF II. “With those exits, there shall only be 3 investments left in the fund which we would be looking to wind up within a year’s time,” he said.
MORE had hit second close of fourth realty fund - IREF IV- at Rs 850 crore recently. “We have till date raised commitments of Rs. 1,000 crore and would be looking to achieve final close by the end of the year,” he said.
IREF II is the second fund launched by MORE which achieved its final close in April 2015 at $70 million (Rs 500 crore) and has till date made 14 investments. The fund has secured 9 exits at an average IRR of 21.3%.
IREF III is the third fund launched by MORE which achieved its final close in August 2017 at $140 million (Rs 1,000 crore) and has till date made 22 investments. The fund has secured 5 exits at an average IRR of 22.0%.
IREF IV is the fourth fund launched by MORE which has recently achieved its second close at $120 million (INR 850 crore). The Fund has made 6 investments till date.
MORE is part of Motilal Oswal Private Equity (MOPE), which is the alternative investments platform of Motilal Oswal Group. The cumulative AUM under MOPE is more than $1 billion (Rs 7,000 crore).