Tatas Join Realty Rush With Rs 4,500-cr Fund

by : Propertiesmls

Better late than never. Even as most of the big industrial houses have set up their realty funds to invest in India's hottest business - real estate, India's oldest and largest industrial house, the Tata group has now suddenly woken up to the opportunity. It has decided to throw in its hat in the ring with a staggering corpus of Rs 4500 crore.

Modelled on the lines of Kishore Biyani promoted Future group's Kshitij, which invests in real estate, Tata Realty & Infrastructure - a newly created company - will invest in infrastructure and real estate projects, a source familiar with the plan told TOI.

Bombay House, the group's headquarter is drawing out a blueprint for its new business. Unlike in the past, where the group was not too hot on the realty sector, the changed scenario is now ensuring that the group is betting big on this sector.
The Ambani brothers - Mukesh and Anil - also have interest in private equity funds. Recently, Morgan Stanley Real Estate fund invested approximately $152 million (Rs 675 crore) for a 10.75% stake in Oberoi Constructions, making it the largest deal in the brick and mortar space.

Tata Sons director RK Krishna Kumar is driving the initiative. Kumar has brought on board Dinesh Chandiok, the former CEO of Ansal Properties to head Tata Realty.

Apart from the Tatas, foreign investors too would be sponsors of the fund. There would be different fund schemes for different projects in phases, the source added.

International Consultancy firm KPMG has been involved in strategising the Tata's real estate business. Tata Realty would look at investing in housing complexes, special economic zones, construction of bridges, ports and airports.

It is not the first time Tatas are dabbling in real estate. Set up in 1984, THDC has put up several residential projects in Mumbai, Pune, Goa and Bangalore including the high-profile Petit Towers in Mumbai's upscale Kemp's Corner.

In the early 2000s, Tatas were looking to exit from the company and had held discussions with Shapoorji Pallonji group.

Things did not fructify and now, THDC has been given a fresh lease of life. It has set the target to achieve a turnover of Rs 2,010 crore by 2010. It is currently developing housing and commercial projects in East, South and North India.

Like other developers, THDC would also join hands with other investors to achieve financial closure of these projects. The group is sitting on land assets worth crores of rupees in different parts of the country.

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