3i in talks to invest $100 m in Mantri Developers

BANGALORE: Private equity major 3i is in talks with Mantri Developers Private for investing up to $100 million, sources said. The deal could be one of the big fund actions in the red hot domestic realty space. Sources said Mantri and 3i has had several rounds of talks and the investment could be routed into a special purpose vehicle (SPV) for a specific project. It must be mentioned that Mantri was one of the first real estate entities to go in for FDI when Morgan Stanley Real Estate picked up close to a 10% stake for $68 million, valuing the company at $650-680 million over a year ago.

Some of the biggest PE transactions in the realty space include TPG-Axon investing $100 million in DivyaSree Developers, Citigroup Property Investors tying up with Nitesh Estates to invest $100 million to build the 250-room Ritz Carlton in Bangalore, UK-based Trinity Capital infusing POUND £9.1-million in Hyderabad-based Manjeera Construction Ltd, New York-based Och Ziff Capital which picked up a 25% stake in Nitesh Estates for $ 51 million and US-based Samsara Capital investing $32-million in IDEB Projects.

When contacted, Sushil Mantri, MD, said the company was in talks with a few private equity players to raise funds, but declined to comment further. However, he added that the latest round of fund raising has no relation to the company’s IPO plans. The fund raised now will be utilised in floating a SPV. While inking the deal with Morgan Stanley, the company known for signature luxury apartments and villas was clear that it would look at a five year window for an IPO, he added.

As on date, the London-based 3i Group has made seven direct investments in India, one is in a real estate fund called India Reit, all of which are on-going investments. In the last 18 months the 3i has invested over $200 million in India. It plans to invest a further $1 billion in Asia over the next three years.

In this context, it must be mentioned that 3i’s war chest has just gotten bigger. A week ago the 3i Group completed the listing of 3i Infrastructure Limited, an infrastructure investment company, on LSE and raised 700 million stg in the process. 3i, post-listing, had mentioned that it plans to invest the proceeds of the global offer over a two-year period and that most of the money would go to assets outside the UK, focusing on the US, Continental Europe and India.