ICICI Prudential AMC to raise Rs 2k crore fund for Mumbai housing

MUMBAI: ICICI Prudential Asset Management Co is raising a Rs 2,000 crore residential development fund focused on Mumbai as the housing market in the India's financial capital sees sustained absorption and redevelopment emerges as a key source of new supply in established locations.

The fund size includes a green-shoe option of Rs 1,000 crore and has a tenure of six years. It is structured as a close-ended Category II Alternative Investment Fund (AIF) and is targeting a gross internal rate of return (IRR) of around 20-25%.

ICICI Prudential Residential Development Fund will focus primarily on residential projects in the Mumbai Metropolitan Region (MMR), particularly in prime micro-markets where land availability for greenfield development is constrained. The investment strategy identifies redevelopment of existing housing societies as the primary development route in several key locations. "The Mumbai property market, particularly the residential segment, continues to see demand for projects by established developers. With this fund, we are looking at development and redevelopment opportunities in the city and the requirement for upfront capital in these projects. The initial response to our fundraising has been robust," Rohit Rathi, Principal - Real Estate Business, ICICI Prudential AMC, told ET.


Between 2020 and 2025, more than 1,100 society-level redevelopment agreements were recorded in Mumbai, unlocking around 432 acres of land. The financing requirement begins before construction, including society payouts, transit accommodation, premiums and approvals, while banks and NBFCs typically participate later at the construction finance stage. This is creating a requirement for capital at an earlier stage of the development cycle.