Pragnya to focus on South with second fund

Pragnya, a Mauritius-based private equity fund focussed on the real estate market in India, plans to launch its $150-million Pragnya Fund 2 in the next few months. The fund will invest in realty and hospitality projects, particularly in the South.

Pragnya focuses on real estate investments in a range of property types - from hospitality to residential and commercial spaces. Pragnya has been sponsored by two professionals - Subba Rao Dukkipati and Gopal Menon - with a background in the global financial services industry.

Pragnya has so far invested about $40 million in realty projects in southern India and expects the figure to reach $100-110 million during this year, according to Dukkipati, managing partner, Pragnya. He said the India growth story was intact and the realty segment offered huge potential for private equity investments.

Pragnya's recent investment was in L&T South City Projects, a special purpose vehicle floated by L&T Urban Infrastructure, Dinesh Rankia Associates and Pragnya Fund 1 to develop an integrated township project off Old Mahabalipuram Road, Chennai's IT corridor.

Pragnya Fund 1 will have 24.5 per cent stake in L&T South City Projects. With this, Pragnya has so far invested in two L&T projects in Kochi and Chennai. The realty and hospitality markets in southern India have started attracting private equity investments over the last few months.

A couple of weeks ago, Sabari Inn, which has promoted two boutique hotels in Chennai, secured investments of Rs 62 crore from ICICI Prudential PMS Real Estate Securities Fund to fuel growth plans over the next three years.

Last month, Red Fort Capital, a global real estate private equity fund, announced a Rs 400-crore investment plan in Chennai's realty market over the next six months. It has already invested Rs 1,200 crore in projects in Bangalore and Hyderabad.