Motilal Oswal Alternates Raises Over $200 Million for Sixth Real Estate Fund
Motilal Oswal Alternates, a leading investment firm, has successfully raised about Rs 1,750 crore ($204 million) for its sixth real estate fund, the India Realty Excellence Fund VI. The firm is optimistic about the residential market's growth and plans to
Real Estate FundMotilal Oswal AlternatesIndia Realty Excellence Fund ViReal Estate InvestmentMidincome HousingReal Estate NewsJan 07, 2025
The firm initially set a target of Rs 2,000 crore when it launched the fund in 2023, comprising a base target of Rs 1,250 crore and a greenshoe option of Rs 750 crore.
However, the structure was adjusted last year during the first close, raising the base target to Rs 1,500 crore and reducing the greenshoe option to Rs 500 crore.
The hard cap remained unchanged.
The firm has already garnered nearly 90% of the fund's overall corpus and expects to finalize the fundraise by March.
The new vehicle is registered with the Securities and Exchange Board of India (SEBI) as a category-II alternative investment fund (AIF).
Motilal Oswal Alternates has already deployed about Rs 1,000 crore from the raised corpus across 10 mid-income housing projects.
In the financial year 2024, Motilal Oswal Alternates committed about Rs 1,300 crore to developers and secured exits from 11 projects, fetching about Rs 1,000 crore.
Saurabh Rathi, managing director and co-head of real estate funds at Motilal Oswal Alternates, expressed optimism about the residential market's growth, citing increasing home loan deployments, declining interest rates, and infrastructure advancements as favorable conditions for sustained growth in the sector.
To facilitate the fundraise, Motilal Oswal Alternates has set up a vehicle in Gujarat’s GIFT City to channel international investments, primarily from Middle Eastern investors, although most of the capital has been raised domestically.
The fund's mandate is to invest in pre-approved or land-stage projects in the residential segment, specifically targeting large developers building middle-income housing projects in India's top eight residential markets.
These investments will primarily take the form of mezzanine debt.
The new real estate fund comes about two-and-a-half years after the firm launched its fifth vehicle in January 2021.
That fund achieved its first close in May 2021 and the second close the following month, bumping up the target to Rs 950 crore from Rs 800 crore.
The fifth fund eventually closed in 2023 with a corpus of Rs 1,215 crore ($156 million at that time).
Motilal Oswal Alternates' real estate platform currently manages assets worth Rs 9,500 crore, having made 168 investments and secured 100 complete exits so far.
The firm's robust performance and strategic approach underscore its commitment to driving growth in the Indian real estate market.
Frequently Asked Questions
How much has Motilal Oswal Alternates raised for its sixth real estate fund?
Motilal Oswal Alternates has raised about Rs 1,750 crore ($204 million) for its sixth real estate fund, the India Realty Excellence Fund VI.
What is the target corpus for the India Realty Excellence Fund VI?
The initial target for the India Realty Excellence Fund VI was Rs 2,000 crore, but it was later adjusted to a base target of Rs 1,500 crore and a greenshoe option of Rs 500 crore.
In which segment does the fund primarily invest?
The fund primarily invests in pre-approved or land-stage projects in the residential segment, specifically targeting large developers building middle-income housing projects in India's top eight residential markets.
What is the structure of the fund to attract international investments?
To attract international investments, Motilal Oswal Alternates has set up a vehicle in Gujarat’s GIFT City, primarily to channel investments from Middle Eastern investors.
What are the key factors driving the growth of the residential market according to Motilal Oswal Alternates?
According to Motilal Oswal Alternates, the growth of the residential market is driven by increasing home loan deployments, declining interest rates, and infrastructure advancements.
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