MFs to buy debentures from realty firms

Mutual funds are looking to invest in debt securities issued by the property developers such as DLF, Unitech and Hiranandani group, in an attempt to ride the real estate boom.

All the major property developers have big fund raising plans via debentures, which offer returns ranging from 12-14 per cent per annum compared with 9-9.5 per cent provided by similar debt securities of top-rated corporate houses. ICICI-Prudential MF has launched a debt-oriented real-estate fund to tap the potential.

"We will park funds in high-return yielding debentures issued by the property developers," said Chaitanya Pande, debt fund manager at ICICI Prudential.