Milestone buys 49 per cent of Godrej Properties SPV

The realty sector has seen two private equity deals recently.
 
The latest investment comes from Milestone Group, which has picked up a sizeable stake in a residential complex being developed by Godrej Properties in Kolkata, for Rs110crore. The investment comes as Godrej Properties is in advanced stages of coming out with its IPO.

However, Ved Prakash Arya, group CEO and MD of Milestone, denied theirs was a pre-IPO placement, saying, “The investment is project specific and has been made in a special purpose vehicle which is developing a mid-segment residential complex in Kolkata.”

The Godrej SPV, christened Godrej Highrises Ltd (GHL), is in the early stages of developing a 3-million-square-feet residential complex at Bharatpur. Arya did not disclose Milestone’s stake in the SPV. However, industry sources told DNA Money the PE group had picked up 49 per cent in GHL. “In fact, Milestone is in the final stages of closing another realty deal which should get announced within 7-10 days,” a source said.

The Rs110crore-invest in GHL is largely being made thorough its Milestone Domestic Scheme-II (MDS-II). Between MDS-I and MDS-II, the investment firm manages $185 million that was raised from domestic investors. Milestone is understood to have invested close to 65 per cent of the combined corpus.

Sources say Milestone, which launched in early 2007, might is very likely to make a few exits this fiscal.

Another PE investment was Red Fort Capital’s acquisition of an additional 4 per cent stake in Parsvanath Developers’ premium luxury residential project in Delhi for Rs25crore. The deal concluded last week.

Market men, however, do not read much into these deals. “As far as PE investments into real estate industry are concerned, the situation is more gloomy than that of the general PE industry, because PE players burnt their fingers with their erstwhile realty investments. This is forcing them to be cautious in this space,” said Jagannadham Thunuguntla, CEO & equity head, SMC Capitals.