Motilal Oswal Real Estate, the realty-focused private equity arm of financial services conglomerate Motilal Oswal, on Monday said it has sold its investment in Shriram Properties, a Bengaluru-based developer, for ₹125 crore. The investor exited from Shriram Greenfield, a 2 million sq.ft project near Whitefield, Bengaluru. The fund had invested ₹67 crore in the Shriram project in December 2014 via an equity stake, thus exiting with a return of 1.87 times.
The investment was made from Motilal Oswal’s India Realty Excellence Fund II (IREF II). The ₹500 crore fund made its final close in April 2015, and is fully deployed across 14 investments.The fund has returned 107.5% of fund corpus (including capital and interest) to its investors within 3.5 years from its final close, a Motilal Oswal Real Estate statement said. It has another 40% capital invested across its balance six investments which would be exited over the next two-three years. IREF II has so far secured eight exits at an average internal rate of return of 21.2%.
“Shriram Greenfield Project is a good example of how even in tough market conditions, a project can be successful based on parameters like right configuration and affordable price point, favourable location, trust associated with the developer for timely delivery and quality of construction backed by active monitoring of the project,” said Sharad Mittal, chief executive, Motilal Oswal Real Estate.
The fund strategy has been to partner with trusted developers in top 6 cities and invest in their affordable/mid-income housing projects, he added.
Mint reported on 17 September that the real estate arm raised ₹575 crore, announcing the first close of its India Realty Excellence Fund IV. The fund will focus on early-stage structured equity or debt investments with established developers and undertake 12-15 transactions of ₹80-150 crore each. On 24 October, Mint reported that Motilal Oswal’s private equity arm raised ₹2,300 crore for its third and largest fund.