Motilal Oswal Alternates said Tuesday its real estate investment arm has mopped up about Rs 1,750 crore ($204 million) for its sixth fund.
The Mumbai-based firm had initially targeted to raise about Rs 2,000 crore for the India Realty Excellence Fund VI when it launched the vehicle in 2023. This comprised a base target of Rs 1,250 crore and a greenshoe option of Rs 750 crore.
The firm, however, rejigged the structure last year when it hit the first close. At the time, it raised the base target to Rs 1,500 crore while reducing the greenshoe option to Rs 500 crore. The hard cap remained unchanged.
With this fundraising milestone, the investment firm has garnered nearly 90% of the fund’s overall corpus. It expects to make the final close by March, it said on Tuesday.
The new vehicle is registered with the Securities and Exchange Board of India (SEBI) as a category-II alternative investment fund (AIF). MO Alts has already deployed about Rs 1,000 crore from the corpus raised thus far across 10 mid-income housing projects.
In FY24, MO Alts, overall, committed about Rs 1,300 crore to developers, while its exits from 11 projects helped fetch about Rs 1,000 crore.
“In 2024, the residential market witnessed significant growth, a trend we expect to continue with increasing home loan deployments, declining interest rates, and infrastructure advancements. These favourable conditions align perfectly with our investment strategy and bolster our optimism for sustained growth in the sector,” said Saurabh Rathi, managing director and co-head of real estate funds at MO Alts.
For the fundraise, MO Alts has also set up a vehicle in Gujarat’s GIFT City to channel international investments, largely from Middle Eastern investors, although most capital has been raised domestically.
The fund has a mandate to invest in pre-approved or land-stage projects in the residential segment. Geographically, these projects will be placed in India’s top eight residential markets and will offer mezzanine debt to large developers building middle-income housing projects.
The new real estate fund comes about two-and-a-half years after the firm floated its fifth vehicle in January 2021. That fund hit its first close in May 2021 and the second close the following month when it also bumped up the target to Rs 950 crore from 800 crore. The fund eventually closed in 2023 with a corpus of Rs 1,215 crore ($156 million then).
The real estate platform’s assets under management are valued at Rs 9,500 crore. MO Alts platform has made 168 investments and secured 100 complete exits so far.