Reliance Capital prepares to launch its maiden real estate focused fund of र 1,000 crore by the end of the year 2012. Reliance Capital is owned by Anil Dhirubhai Ambani (ADA) Group. This maiden launch of Reliance Capital in the realty industry will be done under the surveillance of Reliance Portfolio Management Services (PMS). The new fund will aim at constructing residential properties. The investment will be concentrated in the cities like Pune, Chennai, Bangalore, Mumbai and Delhi primarily. Reliance selected these cities as the real estate markets of these cities are more firm and have an increasing value appreciation.
This fund will be meant to appear as a bridge financier for stalled projects. These projects were stalled by lack of capital. Reliance ADA will be the master investor of this fund. The Reliance ADA group will target an internal return at a rate amidst 18 to 22%. The fund will offer an amount of average र 100 crore for the projects in form of investment.
The new fund with its hybrid structure, will aim at providing both debt and equity to the stalled projects in which they plan to invest in. Earlier in August Economic Times (ET) had reported that र 1500 crore was about to be raised by the Reliance PMS. This amount of र 1500 crore was to be invested in the real estate market. This investment will be in the form of projects around the country.
Any way the company had cut short the amount due to investor’s lack of interest. This lack of interest was created by the lack of opportunities in the real estate market. Research firm Venture Intelligence reported that there was a steady fall in the real estate market and property market. The same firm put forward that 29 real estate investments worth $1.04 billion (र 5,500 crore) happened in the year 2012 which is very low from the previous year’s 87 deals of $3.9 billion. This factor shows a 72 per cent drop in cumulative deal value from 2011.
Hindustan Times added that neither the Reliance ADA group nor Shahzad Madon, the head-PMS and Alternate Assets, Reliance Portfolio Management Services replied to their email queries.