Solitaire Cap to raise Rs 300 cr under first scheme
Moumita Bakshi Chatterjee
New Delhi , October 07, 2005. The Hindu Business Line

REAL estate venture capital fund Solitaire Capital India said on Thursday that it would invest in 8-10 projects across the country in the next six to 12 months under its first `scheme' with a corpus of Rs 300 crore.

The projects will span residential townships, commercial complexes and IT parks. "The corpus of the scheme is estimated at Rs 300 crore, which includes a greenshoe option of Rs 80 crore. While Solitaire Capital and its promoters have committed to 10 per cent of the estimated fund size, the balance would be raised from domestic Institutions, non-resident Indians (NRIs), persons of Indian origin (PIOs), high networth Individuals and domestic corporates," Mr Sanjiv Ahuja, CEO of Solitaire Capital Advisors Pvt Ltd, which administers the fund, told Business Line.

He said the first financial closure for the scheme to raise about Rs 150 crore was likely to be completed by November-end. The second closure could take place two months after the closing of the first phase.

"We will be evaluating projects, including residential townships, commercial complexes, IT parks and shopping malls. We will invest only in real estate projects and not venture into hardcore infrastructure projects," he said, adding that the extent of participation would depend on the type of project.

"In some projects, a stake of 25 per cent and above is preferable. But we could be satisfied with a 10 per cent stake in a large project with blue chip partners. The decision will be taken on a deal-to-deal basis," he said. The real estate fund, which has been approved by the Securities and Exchange Board of India (SEBI), has a life of six years and the company will eye an internal rate of return of 30 per cent on a gross (pre-tax) basis.

Asked about the recent appreciation in real estate prices in the country, he said, "It is true that the prices have run up in metros such as Delhi, Mumbai and Bangalore. One has to stay away from over-hyped markets. We will be looking for innovative deals in category B towns with a population of one million and above. We will be keen on places like Ludhiana, Kochi and Jaipur. We may also look at the National Capital Region, but that is not a high priority market for us."

In fact, Solitaire is already in the investment mode. "We are in the process of signing two township projects where we will go for minority participation," he added.

"Unlike other funds, we want to tap NRIs and PIOs in the South East Asian region and we will also use the experience gained from these markets." He pointed out that the environment is conducive for new real estate funds in India, as the Government had allowed venture capital funds to invest in realty last year, and foreign direct investment was opened up in the sector earlier this year.

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