Tata fund buys stake in Shriram Properties for 468 crore

MUMBAI – Tata Opportunities Fund, the private equity fund of Tata Capital Ltd, has picked up Shriram Group’s stake in Shriram Properties for 468 crore.

M Murali, Managing Director of the real estate company, told BusinessLine that with this deal, Shriram Properties will have a 41 per cent stake while the rest will be with investors, including TPG, Walton Street Capital, Starwood Capital, ASK Real Estate, Prudential ICICI, Sun Apollo and Amplus.

Murali did not disclose the size of the stake Shriram Group has sold to the Tata Opportunities Fund.

The 90,000-crore Shriram Group held its stake in the Bangalore-based Shriram Properties through Shriram Ventures.

With this transaction, Tata Opportunities Fund has completed its second investment outside the Tata Group, taking its total commitments to almost 50 per cent of the $600 million corpus. Its prior investments were in Ginger Hotels, Tata Sky and auto parts firm Varroc Engineering. The deal will help Shriram Properties launch its next cycle of growth and pave the way for an eventual IPO.

Murali said the Shriram Group divested its stake to raise capital. He said Shriram Properties would wait for the right opportunity to launch an IPO. “Shriram Properties is favourably positioned for an IPO in the near future,” he asserted.

Murali said the company has a land bank of around 50 million sq. ft., of which 10 million sq. ft. is being actively developed.

Padmanabh Sinha, Managing Partner, Tata Opportunities Fund, said the Fund believes that the residential real estate market, particularly mid-market housing, should see high growth on the back of increasing urbanisation, changing demographics and an upturn in the economy.

Sprout Capital Advisors LLP advised the Shriram group on the stake sale.