Investment in the Indian real estate sector slowed to $1.1 billion in 2016, after witnessing a high of $3.9 billion in 2015. Photo: Ramesh Pathania/Mint
Mumbai: Investment bank Goldman Sachs is planning to invest as much as $50 million (about Rs325 crore) in a real estate project of Ozone Group, a Bengaluru-based developer, two people aware of the matter said.
“The talks are at an initial stage. They are evaluating both residential and commercial real estate assets of the developer. They are likely to make an investment in at least one of Ozone’s projects,” the first of the two people said.
A second person aware of the development said Goldman could invest up to $50 million in this transaction.
Both Ozone Group and Goldman Sachs declined to comment. Ozone has in the past raised significant sums of capital in the form of structured credit to fund its projects as well as to provide exits to earlier investors in its projects.
Last year, it raised Rs360 crore from Piramal Fund Management Pvt. Ltd for its 150-acre mixed-use Urbana township project in north Bengaluru, to refinance existing loans, Mint reported.
The funds raised also helped the developer give a full exit to Urban Infrastructure Venture Capital Ltd from the project, and a partial exit from its entity-level investment in the developer.
Earlier in 2015, Ozone had raised Rs575 crore from Piramal for the Urbana project refinance loans and to speed up construction.
Ozone’s Urbana is a 150-acre township, which will have 20,000 homes on completion. The township will also have a 2 million sq. ft information technology (IT) park and 300,000 sq. ft of retail space along with a school and a hospital.
Ozone is also developing a 45-acre township Metrozone in Chennai and has launched a premium residential project in Mumbai’s Santacruz. It is also working on three new projects in Bengaluru.
In recent years, Goldman Sachs has made large bets in Indian real estate. In May 2015, it tied up with Nitesh Estates Ltd to jointly invest $250 million in buying income generating assets. As part of this, Goldman invested $37 million in purchasing a 1 million sq. ft shopping centre in Pune.
Also in 2015, the American firm invested Rs900 crore in Piramal Realty for a minority stake to help Piramal buy properties in and around Mumbai. Goldman’s investment in Piramal Realty came a month after the Mumbai-based developer raised Rs1,800 crore from private equity firm Warburg Pincus.
According to Bain & Co.’s India Private Equity report, investment in the Indian real estate sector slowed to $1.1 billion in 2016, after witnessing a high of $3.9 billion in 2015.
Apart from real estate, Goldman is also actively scouting for investments in other sectors.
In an interview with Mint last month, Ankur Sahu, co-head of merchant banking division (Asia-Pacific) at Goldman Sachs said that the firm expects to invest up to $1 billion in India over the next 3-4 years.
The firm is also exploring opportunities to buy distressed assets, which can be turned around, he added.