IL&FS’ private equity arm invests $100m in QVC Realty

MUMBAI: IL&FS Investment Managers (IIML), the private equity arm of IL&FS, has invested $100 million in a real estate start-up—QVC Realty. This investment makes QVC Realty the first venture capital-backed real estate start-up in India. QVC Realty is promoted by Prakash Gurbaxani, who was heading the real estate joint venture between Tishman Speyer and ICICI Venture.

The initial investment has already been deployed to buy a 100-acre plot near Gurgaon. QVC will develop a township on this land in the next three years. Talks are also in an advanced stage for setting up another township of similar size in Bangalore’s periphery, according to Gurbaxani, CEO, QVC Realty.

“In four years, the combined capital value of the two projects is expected to touch Rs 3,000 crore,” he added. The two partners have not yet decided on a fixed profit sharing ratio. “However, the management (QVC and IILM) may take their respective stake on delivery of projects,” said Shahzaad Dalal, managing director, ILFS Investment Managers. IIML has also committed to partner QVC in all its future real estate projects, according to Dalal.

IILM’s investment in QVC will be modular. “Depending on the evaluations of the project, we will arrive at how much stake will be swapped and the profit sharing ratio,” Dalal said. Currently, the equity raised will be used to finance the purchase of land. “For the further development, we may take the debt route,” said Gurbaxani.