Hindujas line up $1 bn realty fund

Group in talks with Saudi, Omani entities.

The Hinduja group, which holds significant land parcels in southern India, is foraying into realty with the launch of two dedicated real estate funds.

The first, a dollar fund, will be of $1-billion with large investments from West Asia, the US and the UK. The group was in the process of working out agreements with several West Asian investors, including Saudi Arabian and Omani entities, company sources said.

This is the first time Saudi and Omani investors will be putting money into Indian realty. Dubai has been a more active investor in the Indian real estate with several companies investing directly into developing projects in the country as well as through funds.

The second fund is a smaller domestic fund of $300-400 million. The Hindujas themselves were expected to pick up 10 per cent in both funds as well as provide the land for the projects, group sources said.

While no details were available on when the funds would be launched, executives indicated that both funds would debut in the calendar year.

The funds will be put together by the group's Geneva-based bank, Amas Bank, for investment in properties being developed by the realty arm of group company Ashok Leyland Properties.

Another group company, Gulf Oil, holds 3,500 acres of land parcels scattered across southern India. They are in Chennai, Bangalore, Hyderabad and Visakhapatnam, where the initial projects are likely to be located. The funds also are expected to invest in enhancing the group's land banks.

Ashok Leyland Properties is planning to develop a mini township in Bangalore near the proposed second airport at Yelahanka, which will include commercial information technology and high-end residential spaces on a 210-acre plot. It is also working on an exclusive 40-acre high-end residential property in Bangalore.

In Hyderabad, the company is looking at a knowledge park to house research and development centres for IT, biotech and nanotech companies.

It has appointed German consultants Bio Allainz to advice on the project.

In addition, the group is planning an SEZ in Visakhapatnam where it holds 1,100 acres of land as well as looking at reviving its plans for a 1,040-Mw thermal power plant.

Group executives clarified that discussions with the Centre and the state were still on and no firm decisions had been taken on the SEZ and the power plant. Sources also indicated that the group was interested in bidding for the ultra mega-power projects planned by the Centre.