Private equity funds sense their time has come in the Indian property arena, with developers offering plum deals as banks tighten lending and a stock market slump shuts off public share offerings.
Since India eased rules on inward investment in the construction industry in early 2005, foreign investors have earmarked an estimated $20 billion for the booming property market. But government figures show only about $2 billion has actually been spent in the last three years.
Funds used to complain that Indian developers slapped inflated price tags on themselves, their land, and projects.
But a fall in company valuations, and prospects of a drop in overheated land prices, has cheered private equity investors while making life tougher for developers.
Mr. Parry Singh, managing director of Red Fort Capital, which runs a $300 million fund that includes sovereign wealth fund money, said, “It’s brutal”.
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Funds used to complain that Indian developers slapped inflated price tags on themselves, their land, and projects.