Motilal Oswal’s real estate equity firm investments Rs 525 crore via seven exits

Through its India Realty Excellence Fund (IREF) II and III, the real estate private equity subsidiary of Motilal Oswal Group, Motilal Oswal Real Estate made around Rs 525 crore of exists across seven investments.

Rajesh Lifespaces in Mumbai, Casagrand Builders in Chennai, Shriram Properties in Bengaluru and ATS Group in NCR received the exists by the Motilal Oswal Real Estate with an average internal rate of return of 21%.

Director & CEO at Motilal Oswal Real Estate, Sharad Mittal stated, “Our strategy has always been to partner with established developers in top six cities and invest in their affordable or mid-income housingNSE -0.87 % projects through different structures including equity and mezzanine by providing capital at the right stage.”

He also added, “These exits, which have come at such a difficult cycle for the realty sector, lend credence to our investment strategy and robust underwriting and asset management process.”

Following the IL&FS crisis, the real estate sector is facing a severe crisis. NBFCs and HFCs are facing considerable liquidity crisis and are finding it difficult to disperse new loans. Mittal said that “We are also looking at making two more exits in the next couple of months from our second fund, IREF II. With those exits, there shall only be three investments left in the fund, which we would be looking to wind up within a year.”

In the second close of its fourth realty fund IREF IV, Motilal Oswal Real Estate had recently announced an investment of Rs 850 crore. The fund has raised commitments of Rs 1,000 crore and is looking for a final close by the end of the year. It has made six successful investments.

At Rs 1,000 crore, the third fund launched by Motilal Oswal Real Estate IREF III achieved its final close in August 2017. At an average IRR of 22%, the fund has secured five exits and has returned around 26% of the fund within two years from its final close.