Kotak Realty Fund sells stake in Bangalore project

BANGALORE: Kotak Realty Fund, the real estate private equity fund of Kotak Mahindra Group, has sold most of its stake in a high-end residential project developed by Bangalore-based Lalith Gangadhar Constructions.

"We have exited a significant portion of the residential project, making double digit returns," said Vikas Chimakurthy, director at Kotak Realty Fund.

In 2008, Kotak Alternate Opportunities (India) Fund had invested Rs 48 crore in LGCL Ashlar, which has 63 villas spread over 7.75 acre in Sarjapur, Bangalore. The fund has also sold 49% stake in Lalith Gangadhar Constructions to its promoter Girish Puravankara. Kotak had invested Rs 5 crore in the real estate firm in 2007.

"The promoters have not invested any capital in the company. The exit will be in tranches and we had made 10 times return on the five-year old investment at Rs 53 crore," said Chimakurthy.

Lalith Gangadhar Constructions has seven ongoing projects totaling over 300 units across Bangalore under different stages of construction. The company is also in the process of launching 25 high-end skyvillas in the city.

"There is a huge demand for properties under Rs 3 crore and we have seen 30-40% appreciation in prices over last two years," said Girish Puravankara, managing director, LGCL. "We plan to focus on low volume high-end projects to drive growth."

Over the past few years, Kotak has exited Rs 1,600 crore worth of investments.