The company is vetting final-stage proposals submitted by Macquarie, JP Morgan, Standard Chartered and Morgan Stanley, a pension fund and a sovereign wealth fund.
MUMBAI: Tata Housing is in advanced-level talks with a few institutional investors to raise Rs 3,200 crore for its upcoming premium and luxury residential projects across top five cities.
The real estate developer is vetting final-stage proposals submitted by private equity funds Macquarie, JP Morgan, Standard Chartered and Morgan Stanley, a pension fund and a sovereign wealth fund.
The capital pool could be raised from one fund or a consortium of investors, three people close to the development told ET. The ‘investor list’ would be put up for board approval over the next couple of weeks, a source said.
“The deal will help Tata Housing to take up newer projects. The company has not made significant gains in its earlier projects due to sector-related problems,” said an analyst tracking the real estate sector.
“Since this is an equity relationship, the company will only need some (pro-real estate) sector tailwinds and timely completion of project to improve project yields,” the analyst said.
Tata Housing intends to construct premium and super-luxury residential enclaves in Mumbai, Chennai, Kolkata, Delhi and Bengaluru, priced between Rs 3 crore and Rs 10 crore at booking.
The company, according to sources, may also use the incoming funds to construct super-luxury holiday homes at Kasauli, Lonavla and Goa. Tata Housing officials, when contacted, refused to comment. “Tata Housing may co-invest in this project; their participation could be just about 30 per cent; this means, about 70 per cent of project profits would go to the investor,” the source close to the deal said.
The Tata housing deal is in continuation of several large ticket (project-level) deals struck over the past few months. PE funds have invested close to $1.5 billion across 40 deals between January and July this year.
Marquee institutional investors like GIC – Singapore, Canada Pension Plan Investment Board, Dutch pension fund asset manager APG Asset Management and sovereign wealth funds Qatar Investment Authority, among others, have made chunky projectspecific investments over the past one year.
Analysts expect this trend to continue as they expect lower interest rates and buoyant markets to spur demand for prime real estate over the next couple of years.
Tata Housing targets to complete the first phase of its Bengaluru project The Promont by early 2017.
The company has three ongoing projects in Delhi, which it hopes to wrap up in two years. Projects in Mumbai and Goa would be ready for possession by 2019, a source in the company said. Besides this, Tata Value Housing, a group company, recently raised Rs 250 crore for investments in the affordable housing space.