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Ansal in talks with PE cos to raise $100 mn

Ansal Properties and Infrastructure (API) is in talks with at least two private equity (PE) players, including Red Fort India Real Estate Fund and Bahrain-based Investate Realty, to raise up to $100 million through equity stake sale in its two projects, according to two people close to the development.

A spokesperson of the Delhi-based company said that API was looking for PE investments in its projects, but declined to comment on whether it was in talks with Red Fort and Investate Realty. Red Fort declined to comment, while Investate didn’t respond to an email query.

According to people close to the situation, the two PE players are separately in negotiations with Ansal to buy at least 26% in the two proposed townships in Lucknow and Dadri near Delhi. They said talks are in preliminary stage and Ansal is looking to raise up to $50 million each in the two projects. HDFC Asset Management Company had picked up 8.5% in Ansal’s Dadri project for Rs 225 crore last year before the onset of real estate downturn.

People with knowledge of the talks said valuation for the Dadri project has fallen since the investment by HDFC AMC, as property prices slid and land valuations declined. Given the new reality, Ansals have scaled down their expectations, the two people said.

API has proposed to develop a 2,500-acre township in Dadri and 2,000-acre township in Lucknow. It couldn’t be ascertained how many acres API has actually purchased for the projects so far. The two proposed townships are expected to have homes, shops, offices, hospital, hotel, academic institutions and sports facilities.

Red Fort India Real Estate Fund, which doesn’t disclose its fund size, has made over a dozen investments in the Indian realty space, with a typical deal size of Rs 150 crore – over the last four years. It recently invested around Rs 115 crore in Pasrvnath Developers’ high-end residential project in Delhi. It’s looking at more investment opportunities.

Three-year-old Bahrain-based Investate Realty, which has a paid up capital of $108 million, is engaged in a range of activities including real estate development, private equity and corporate finance. The company’s shareholders include Omniyat Holdings of Dubai, Kuwait Investment Company, The First Investor of Qatar and Al Rashed Group of Saudi Arabia. Last year, Investate entered into a deal with Bahrain Financial Harbour (BFH) to develop $300 million worth residential and retail project in Bahrain.

Source: Economic Times

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