Tata takes $80m Shriram Properties stake

The fund's second non-Tata investment takes it to almost 50% deployed

Tata Opportunities Fund has acquired a stake in Shriram Properties, an Indian real estate company, for $80 million, according to the firm. The exact stake was not disclosed but the deal reportedly values Shriram at $500 million.

The business is part of larger conglomerate Shriram Group and builds and operates housing across India. The company has built up space of over 8.36 million square feet, with 12.61 million square feet to be developed and 45.85 million square feet currently under development, according to the firm.

The firm joins global private equity firm TPG Capital as an investor, TPG buying a 15 percent stake in the business for $75 million in 2004. TPG will not sell any of its stake in the transaction.

“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 up-turn in the economy. Companies like Shriram Properties with its professional management team and differentiated business model are well placed to benefit,” Paddy Sinha, managing partner of Tata Opportunities Fund, said.

“The fund is actively pursuing investments into other such companies that have a history of operational excellence and robust governance led by dynamic management teams.”

The deal is Tata Opportunities Fund’s second outside the Tata Group, one of India’s largest conglomerates, and takes the vehicle to almost half-way deployed, according to Tata. 

The $600 million fund, which closed in May 2013, invested $50 million in a 15 percent stake in Varroc Group in April, an India-based automobile manufacturing company, Private Equity International reported earlier.

Varroc specialises in the manufacturing of plastic, polymer and metallic parts, as well as electrical components, for cars, generates around $1.15 billion in revenue each year.

The fund’s prior investments in Tata-related companies include Ginger Hotels and Tata Sky, a joint venture with Rupert Murdoch’s 21st Century Fox (formerly NewsCorp).

Tata Opportunities Fund, raised by the private equity arm of Indian family conglomerate the Tata Group, invests in both growth and buyout deals in Indian businesses both from within and outside the Tata Group.