Tata Capital PE fund pumps $80 mn in Shriram Properties

Mumbai: A private equity fund owned by Tata Capital on Wednesday said it has invested USD 80 million (about Rs 468 crore) in South India-focussed realty firm, Shriram Properties.

"We believe that the residential real estate market, particularly mid-market housing, should see high growth on the back of increasing urbanisation, changing demographics and an upturn in the economy," Tata Opportunities Fund Managing Partner Padmanabh Sinha said in a statement.

The Tata Opportunities Fund (TOF) is a third party private equity fund which invests in select Tata group entities as well as other independent Indian businesses.

The fund gets a board seat after the investment.

This is the second non-Tata Group investment of the USD 600-million Tata Opportunities Fund raised last year, the statement said.

The sector agnostic fund is "actively pursuing investments in other such companies," Sinha said.

Shriram Properties, part of the Rs 90,000-crore Shriram Group, has wide ranging interests including chit funds and financial services. It is the company's management team as well as differentiated business model which attracted the fund, he said in the statement.

Tata Opportunities Fund's earlier investments include stakes in Tata Group's economy hotel chain Ginger Hotels, the groups' Direct To Home (DTH) television broadcast player TataSky and auto component company Varroc Engineering, the statement said.

Shriram Properties has over 50 million square feet under development across Bangalore, Chennai, Coimbatore, Kolkata, Visakhapatnam and Hyderabad, the statement said.

Other funds, including TPG, Walton Street Capital, Starwood Capital, ASK Real Estate, Prudential ICICI, Sun Apollo and Amplus have invested in the company in the past.

Shriram Properties Managing Director M Murali said that the investment would help the company begin its next phase of growth and has also positioned it "favourably for an initial public offering in the near future".

Tata Capital manages Private Equity and Venture Capital funds with cumulative assets under management of approximately USD 1 billion. It has five funds -- Tata Capital Growth Fund, Tata Capital Healthcare Fund, Tata Capital Innovations Fund, Tata Capital Special Situations Fund - Trust and Tata Opportunities Fund, according to its website.