Hedge Investors flock India

By agencies   |   Monday, 05 June 2006, 19:30 IST
Printer Print Email Email
MUMBAI: With rules permitting inflow of foreign venture capital fund to invest in India since 2005, foreign realty funds have been flowing in at a committed rate of $ 4 billion to grab the fast selling infrastructure share of real estates. Barclay’s Capital, a New York based realty had its managers casting a disbelieving eye on Mumbai’s Nariman Point describing it as among this week’s world’s 10 most expensive office locations. In a few weeks, the overwhelming number of privately owned Indian developers would welcome a probable defining moment. DLF, a Delhi based builder which developed India’s call center capital in Gurgaon is out to launch India’s first property initial public offering. With a land bank of 3,500 acres valuing $ 25 billion, it is India’s biggest company in market capitalization, trespassing Reliance Industries, Hindustan Lever and Infosys Technologies. DLF is geared to sell 10 percent stake with a 15 percent claw on the Indian share markets after a volatile month. Hedge investors who lost out on DLF’s pre-IPO placement with foreign funds are resolute to gain a bit of the giant property sale and would ensure the success of the venture despite market weakness. This would give a fillip to smaller developers. With pressure from Indian expatriates to cash in on the Indian opportunity, hedge investors who believe they missed out on the first phase of opportunities in telecommunications and technology, are all geared up for the next phase of investments. Global realty funds launched by the likes of Goldman Sachs and Morgan Stanley has eased global liquidity over the past four years and has pumped capital into riskier markets. The outcome of foreign funds, with a modest $ 131 million, has been deployed by overseas investors who continue to bank on the sidelines. ICICI bank’s private equity unit and its joint-venture partner, Tishman Speyer revealed $ 1 billion strategy to be invested in India. IBM is to take up 2 million sq. ft. of commercial space elsewhere other than Mumbai due to skyrocketing rent and service charges that increased by a phenomenal 69 percent there over the past year.