Wednesday, April 11, 2007

IL&FS Investment Managers invests $100 mn in real estate startup QVC Realty

IL&FS Investment Managers Limited (IIML), the private equity arm of IL&FS, has invested $100 mn in QVC Realty, a real estate startup, making it 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 Ventures.

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. In four years, the combined capital value of the two projects is expected to touch Rs. 3000 crores. The two partners have not yet decided on a fixed profit sharing ratio. However, the management (QVC and IIML) may take their respective stake on delivery of projects. IIML has also committed to partner QVC in all its future real estate projects.

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

Article in DNA Money.

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