Red Fort Capital to float domestic realty fund


Chennai : New Delhi-based realty funding company Red Fort Capital Advisors Pvt Ltd will float a Rs.8-billion fund to finance real estate development projects in India.

Support TwoCircles

“The corpus will be mobilised from high net-worth individuals and corporates within India,” Parry Singh, director of the company, told the media here.

According to him, the money will be raised by the end of this month and investments out of it will be made from March.

Meanwhile, the company has invested around $300 million out of its $400-million fund called Red Fort India Real Estate Fund I, which raised money through foreign direct investments.

The company has invested in three projects in Bangalore and in a township project in Hyderabad.The company has also bought 10 acres in Chennai for an undisclosed sum.

While the company has decided to build residential apartments here for the middle-income group, it is yet to zero in on a developer. It plans to invest around $100 million in the Chennai market.

Unlike pure private equity firms that acquire stakes in a company, Red Fort Capital is reluctant to do the same in a real estate development company. The company invests on project-to-project basis.

“For private equity investors, the exit route is the initial public offering by the company in which they have invested. But in India, there are not many real estate development companies that would go for listing,” said Singh.

Unlike other realty funds, Red Fort Capital also invests in land to reap higher returns.

Apart from funds, Red Fort Capital brings technical expertise to the table, he said.

One of the founding directors, G.B. Singh, holds a patent for fly ash-based cellular lightweight concrete building blocks.

Prior to this venture, G.B. Singh was the CEO and president of construction division, DLF Universal. He has also headed Hindustan Prefab Ltd, a central government enterprise.