Tata plans $1bn real estate and infrastructure fund

The fund, which began fundraising in mid-2008, aims to meet its target before the end of 2009, according to reports. Tata plans to develop $2.3bn of real estate projects over the next three years.

Tata Realty and Infrastructure (TRIL), the real estate arm and infrastructure development arm of Indian conglomerate Tata Group, intends to raise $1 billion for a real estate and infrastructure fund before the end of this year.

TRIL was not available for comment at press time. 

Kishore Saletore, chief financial officer of Tata Realty and Infrastructure Ltd, reportedly told journalists in Mumbai that the fund, which opened in mid-2008, has recently seen strong interest from Asian and European investors. He said TRIL had firm commitments for a quarter of the fund's $1 billion target.

“This will meet a large part of our equity and debt requirements… elections were a decisive factor and investors are very excited,” he said.

TRIL has a net worth of INR10 billion ($210 million; €151 million) and can leverage itself to set up projects worth up to INR120 billion, Saletore added.

TRIL intends to develop projects worth INR200 billion (€3 billion; $4.2 billion) in India over the next three years. Of the INR 200 billion, INR110 billion (€1.7 billion; $2.3 billion) would be invested in real estate, INR50 billion in roads and INR40 billion in other infrastructure, excluding India’s Monorail and Metro projects, the firm said.

To fund the real estate projects, TRIL has raised the approximately $700 million Tata Realty Initiatives Fund. This fund has reportedly deployed 18 percent of its capital.

Earlier this week, the board of Reliance Infrastructure, a subsidiary of Indian company Reliance-Anil Dhirubhai Ambani Group, approved the issue of 42.9 million preferential shares to its promoters and investors to raise approximately INR43 billion ($919 million; €657 million). The capital will enable the company to participate in larger infrastructure projects in the country.