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Motilal Oswal Alternates Raises Over Rs 1,750 Crore for Sixth Real Estate Fund to Fuel Growth in India’s Top Cities

In a significant move that reflects the growing confidence in India’s real estate sector, Motilal Oswal Alternates (MO Alts), the alternative investments arm of Motilal Oswal Financial Services, has successfully raised more than Rs 1,750 crore for its India Realty Excellence Fund VI (IREF VI). This marks the fund’s sixth iteration and is poised to make substantial investments across India’s top eight cities. With the backing of high-net-worth individuals, family offices, and corporations, including earlier investors, this initiative is set to bridge crucial funding gaps in the country’s booming real estate market.

A Year of Growth and Commitment

In the current financial year, MO Alts has already committed approximately Rs 1,300 crore to developers via its platform. Notably, Rs 1,000 crore of this has been directed towards projects in major cities such as Mumbai, Pune,Chennai, Hyderabad, and Kolkata. The fund has already aligned itself with key developers in these cities, including Ajmera Realty, Runwal Enterprises, Ambuja Neotia Group, Casagrand Group, Radiance Realty, Mantra Properties, BSafal Group, Bhagwati & Gami Group, and Candeur Group. These investments primarily focus on mid-income housing projects, which align with the growing demand for affordable and quality housing across the country.

India’s Real Estate Resilience

India’s real estate sector has exhibited remarkable resilience, even amid global challenges. A combination of strong economic fundamentals, stable interest rates, and supportive government policies has fostered an environment ripe for growth. According to Saurabh Rathi, Managing Director & Co-Head of Real Estate Funds at MO Alts, the residential market has seen notable growth in 2024, driven by increasing home loan deployments, declining interest rates, and infrastructure development. The optimistic outlook for the sector positions the fund to take advantage of emerging opportunities in the market.

Momentum Building with IREF VI

The IREF VI fund is already seeing substantial traction. Within just 10 months of its first close, it has committed over Rs 1,000 crore across 10 investments, underscoring the urgency and demand in the market. With around 90% of its target corpus already secured, the fund is poised to wrap up its fundraising process in the next two months.

Anand Lakhotia, Managing Director & Co-Head of Real Estate Funds, highlighted the tightening regulations on banks and NBFCs as key factors that create fertile ground for private investments like those from MO Alts. With favorable market conditions, the firm is positioned well to capitalize on the opportunities presented by the evolving regulatory landscape.

Strong Track Record of Exits and Returns

In addition to raising funds, MO Alts has made over 11 exits from its earlier funds, resulting in robust returns amounting to Rs 1,000 crore in the last year alone. This consistent performance highlights the platform’s ability to deliver substantial value to its investors while navigating the complex and dynamic real estate landscape.

Bridging the Capital Gap

One of the key areas where MO Alts sees potential is in bridging the capital gap at the early stages of real estate development. The platform’s ability to partner with established developers in India, and provide funding where traditional financing mechanisms fall short, sets it apart in the industry. As the real estate market continues its robust growth trajectory, the firm is committed to continuing this strategy, delivering value to investors, and positioning itself as a key player in the space.

Expanding Footprint in Real Estate

Currently, MO Alts manages six real estate funds along with multiple standalone Non-Convertible Debenture (NCD) investments. The platform’s cumulative assets under management (AUM) in real estate stand at an impressive Rs 9,500 crore, with 168 investments made and 100 complete exits secured. Overall, the platform manages more than $2 billion in AUM across various asset classes, reinforcing its strength as a comprehensive investment firm.

Conclusion

The success of Motilal Oswal Alternates’ IREF VI fund is a testament to the growing optimism surrounding India’s real estate sector. With significant investments already made in strategic markets and a robust pipeline of opportunities, MO Alts is set to continue its leadership role in facilitating the growth of India’s real estate development. By bridging capital gaps, aligning with top-tier developers, and delivering robust returns, MO Alts is poised to unlock value for its investors while contributing to the nation’s real estate success story.

As the real estate market in India continues to thrive, MO Alts stands at the forefront, leveraging its expertise and extensive network to capitalize on emerging opportunities and deliver sustained growth and value.

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