Motilal Oswal Alternates to raise Rs 2,000 cr realty fund by March 2024

Motilal Oswal Alternates on Thursday said it is targeting to raise Rs 2,000 crore in a realty fund which will primarily lend to residential developers for buying land.

This will be the sixth such fund from the platform promoted by the domestic brokerage, and over the last 15 years, it has delivered a return of over 20 per cent to investors, its managing director and chief executive Vishal Tulsyan told reporters.

The company is targeting to achieve similar returns from the latest fund as well, he said, adding that while the real estate went through a very difficult phase over the last decade due to aspects like getting it under a regulatory purview, the prospects look much better now.

It is primarily targeting to lend to developers looking for funds to purchase land, he said, adding that banks and non-bank finance companies do not engage in this business.

The platform plans to raise the money from avenues like high net-worth individuals, domestic institutions and family offices by March 2024, and will fully deploy the money in the next 18-24 months.

It will be lending to residential real estate projects in top eight realty markets with each city not getting more than 25-30 per cent of allocation in total, Tulsyan said, adding that no developer will be given more than 15 per cent of the funds.

It has deployed Rs 7,500 crore in 145 developers since inception, and a senior official said that there have been up to eight instances of stress so far, which it was forced to deal with.

Tulsyan said over the next five years, over Rs 2.5 lakh crore of funds will be deployed into land buyings.