PE players prefer single project route
With lower corporate governance standards in the realty space in India, private equity (PE) players are now looking at investing in specific projects.
By Gaurie Mishra & Mayur Shekhar Jha, TNN |
NEW DELHI: With lower corporate governance standards in the realty space in India, private equity (PE) players are now looking at investing in specific projects.
Even big ticket PE companies like CVC and Morgan Stanley are looking at making investments in the sector through the single-project route. Experts say these single-project deals will typically be in the range of $20-50 million.
“Single projects by real estate developers are attracting a lot of interest from private equity players. With most real estate companies having poor corporate governance standards, single project ventures ensures PE investors are not held responsible for other projects of the company,” said head of a global private equity firm who did not wish to be quoted.
“Though there is a lot of interest in the big-ticket deals in real estate, a lot of private equity players have evinced interest in investing in 100-acre integrated townships and other specific real estate projects. Infact, both global and local PE players are keen on taking this route,” said head (investment banking), Enam Securities, S Subramanium.
Its like a win-win situation for both PE investors as well as developers. “We are in talks with some private equity funds. Infact, investments on basis of specific projects also suit our requirements,” Kamal Taneja, MD, TDI said.
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And this trend is not just limited to small or mid-size real estate companies. A couple of months back, HDFC Realty Fund had taken a 33% equity in an SPV floated by Ansal API for developing an IT SEZ in Greater Noida.Download
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