Investcorp raises $130m to fund Indian real estate projects

The new investment vehicle will provide last-mile financing to developers

Investcorp on Monday said it closed a new fund with €318 million in commitments . Courtesy Investcorp

Bahrain-based asset manager Investcorp, which counts Mubadala Investment Company as its biggest shareholder, raised $130 million (Dh477m) to finance real estate projects in India, a market facing a severe liquidity crunch.

The funding initiative will focus on affordable and mid-market housing segments in the top seven cities in India, the third-largest Asian economy, Investcorp said in a statement on Wednesday.

“We believe that the Indian affordable housing segment represents a sizeable and attractive market opportunity, catalysed by urbanisation and structural reforms,” said Vikram Aggarwal, head of private markets at BAe Systems Pensions, a cornerstone investor in Investcorp’s fund. There is significant demand, however, the market is facing a lack of “institutional quality capital to fund projects", he noted.

Investcorp, which manages more than $28 billion in assets globally, has already deployed $200m in 27 residential projects in India through two of its real estate funds that provide structured senior credit to developers.

“The current slowdown in the residential markets as well as in the flow of credit in India creates an opportune timing for us to launch this new lending initiative, which builds upon our track record of similar credit investments in India,” Ritesh Vohra, partner and head of real estate, Investcorp India, said.

Investcorp is also active in the mid-market private equity space in India, having made investments in firms including Zolo Stays, Citykart, Intergrow Brands, and Bewakoof.

In November, the company closed a Dh165.2m funding transaction for Nephrocare Health Services, which runs a network of dialysis centers across India. NephroPlus, as the company is known, had already received earlier investment from Bessemer Venture Partners and the International Finance Corporation, the development finance arm of the World Bank. They will retain stakes in the company alongside Investcorp, the company said at the time.

In November, Investcorp also bought a portfolio of 126 industrial properties in the US for $800m.