Piramals float realty venture capital fund

The Rs 3,000 crore Piramal Enterprises with diversified interests in pharmaceuticals, real estate and construction has floated a venture capital fund with an initial investment of Rs 250 crore.

Indiareit Fund, as it is called, will invest in real estate development companies.

The new venture fund's major focus will be long-term capital appreciation through equity participation in real estate projects in various geographical locations, said Ajay Piramal, chairman, Piramal Enterprises.

Piramal added that the fund is already in discussions with leading developers in the western and southern cities for residential as well as commercial projects.

"The fund will soon execute its first investment deal with a developer. This will be an early-stage investment to create a signature project coupled with lucrative returns for our investors," Piramal said.

Speaking on the future plans for Indiareit, Piramal said, "This is the first in the series of schemes targeted at domestic high networth individuals. It would garner funds in subsequent schemes targeted at a wider audience including non-resident Indians (NRIs), entities bringing foreign direct investments (FDIs) and corporate bodies."

Indiareit will maximise returns for its investors by co-investing with reputed builders/ developers across the country based on clearly identified value propositions, he added.

Globally, the real estate business accounts for assets of over $50 trillion. The share of real estate in the country's gross domestic product has increased to 7 per cent from 5.25 per cent in 2002-03, which is still considerably lower than the 15 per cent share of real estate business in developed economies, said analysts.

The fund, promoted by Piramal, has been registered under the Sebi regulations, and has Indiareit Fund Advisors as its investment advisor.

Piramal Enterprises' other group companies include Nicholas Piramal India and Gujarat Glass.