Leading investment bank Goldman Sachs is reportedly considering an investment to the tune of $50 million or approximately Rs.325 crore for a major real estate project helmed by the well known Ozone Group which is a Bangalore based developer.
According to sources, discussions are still in the very early stages with Goldman Sachs carefully evaluating the commercial and residential real estate assets of the Ozone Group. Goldman Sachs is also likely to invest in at least one out of the many projects by the Ozone Group. Goldman Sachs may invest up to $50 million as stated by another source.
No official comments have been made by Goldman Sachs and the Ozone Group alike. Ozone Group has earlier raised considerable amounts of money through structured credit for taking care of project financing along with offering exits to previous investors for its real estate projects. Only last year, the Ozone Group raised a sum of Rs.360 crore from Piramal Fund Management Private Limited for a 150 acre mixed-used Urbana township offering located at North Bangalore and also for refinancing existing loans. These funds also helped the Group offer a full exit from the project to Urban Infrastructure Venture Capital Limited and also offer a partial exit for the entity from its investment in the developer at an entity-level.
In the year 2015, Rs.575 crore was raised by the Ozone Group from Piramal for taking care of refinance loans for its Urbana project and also for speeding up the construction process. Urbana is a 150-acre township which will offer a whopping 20, 000 homes once it is completed. The township will also integrate an IT Park spreading over 2 million sq. ft. along with retail space encompassing 300, 000 sq. ft. There will also be a hospital and school present within the township.
The Ozone Group is also constructing the Metrozone township Chennai which spreads over 45 acres and has launched a luxury residential project in Santacruz, Mumbai, sometime back. The Ozone Group is also working on three new projects at present in Bangalore. Goldman Sachs has been investing heavily in Indian real estate over the last few years. In May 2015, Goldman Sachs entered into a partnership with Nitesh Estates Limited for investing $250 million jointly for purchasing assets for income generation. As part of this deal, Goldman Sachs also invested another $37 million for purchasing a shopping centre in Pune that covered 1 million sq. ft.
In 2015, Goldman Sachs also invested around Rs.900 crore for a minority stake in Piramal Realty and this investment was aimed at supporting Piramal’s quest to purchase properties in and around the city of Mumbai. Goldman Sachs invested in Piramal Realty around a month after the Mumbai-based real estate developer also raised another Rs.1,800 crore from Warburg Pincus, the private equity firm.
As per the report by Bain & Co, the Indian real estate sector witnessed investment of $1.1 billion in the year 2016 after the peak of $3.9 million in the year 2015. Goldman Sachs is reportedly looking for investment opportunities in other sectors along with real estate. According to the co-head of the merchant banking division (Asia-Pacific) at Goldman Sachs, Ankur Sahu, stated that the firm is expecting to pump in up to $1 billion over a period of 3-4 years in India. Goldman Sachs is also looking at opportunities for snapping up distressed assets which can then be turned around according to Sahu.
