IL&FS had invested in this company when Bhartiya Urban was accumulating close to 125 acres to buid Bhartiya City near Hebbal in Bangalore. While IL&FS could not be immediately reached for comments, the management of Bhartiya Urban declined to comment. This move by IL&FS comes at a time when the exits from real estate investments from the private equity players are getting difficult and funds are being forced to exit at a loss or extend their investment period.
Bhartiya Urban, in which the publicly-held Bhartiya Fashion has a 30 per cent stake, is spending Rs 2,000 crore in the first phase of setting up the Bhartiya City over 125 acres involving a total development of 17 million square feet.
In the first phase, Bhartiya City will develop a total of 5.5 million square feet with IT SEZ, residential and hospitality and retail development. The company has got financial closure for a debt of close to Rs 400 crore, while the rest will be from part equity and customer advances. Company officials said that they may not be looking at external equity investor in the immediate future for the first phase. The total cost of the project will be around Rs 7,000 crore spread over a period of eight years.