India-focused IL&FS Realty Fund has picked up a 15% stake in infrastructure Ventures India, a special purpose vehicle (SPV) floated by Mumbai-based developer Akruti City, for Rs 200 crore.
Infrastructure Ventures India is primarily a public-private-partnership (PPP) project formed for developing housing infrastructure for the Mumbai police in suburban Ghatkopar. When contacted, Akruti City chairman Hemant Shah declined to comment on the deal.
However, a source close to the development said: “Since its a PPP project, the SPV will get additional FSI for development. Apart from Akruti, there are other equity holders in the SPV.”
The deal assumes significance as Akruti has struck the deal at a time when growth in the real estate market has slowed and private equity funds are shying away from SPV-level deals. Instead, they are focusing on entity level deals, wherein the private equity firm takes an equity stake in the parent company and, hence, has flexible exit options.
A drop in valuations has also prompted real estate funds to negotiate on entity-level transactions rather than buying stake in SPVs.
In a recent instance of an entity-level deal, private equity firm Sun Apollo plans to buy a 49% stake in Keystone Realtors for Rs 300 crore.
Source: Economic Times