Kumar Builders looking to raise $100M for its projects

Kumar Builders, a widely known and trusted name in the real estate sector is looking forward to raise $100 million from real estate dedicated private equity funds for its realty projects. The company is likely to raise capital against their township project in Pune and residential projects in Mumbai.  It has raised investments of around 300 crore from various funds in the previous and ongoing projects.

Lalit Kumar Jain, the chairman and managing director, Kumar Builders stated that, “We are in active negotiations with funds and we are trying to close certain funding. In Q1FY15 we should see some closing. The money will be raised for a mix of projects in Mumbai and Pune.”

Kumar Builders

Kumar Urban Development ltd raised Rs 80 crore last year from ICICI Prudential PMS Real Estate Portfolio for its 100-acre township in Pune.  It is now focusing on building a full-fledged portfolio in the country’s financial capital and largest property market by value.

Talking about the redevelopment projects in Mumbai which are now under construction, Jain said,” The approvals have been very slow; so those projects which had to be launched two years back are now coming on the launching pad. Now we have 12 projects under construction.”

The consolidation and faster execution of projects is the main focus of Kumar Builders. The company has come up with a new business strategy which includes the formation of joint venture with other developers for smaller projects.

Jain said, “We have very large portfolio of projects and now we have taken a decision not to execute smaller projects on our own but will jointly develop them. This would include mostly residential projects but will have all types of projects in it.”

The company believes that in order to increase the profit margins for realtors, the prices need to move up. Jain said, “Costs have gone up and sale prices have not moved up, thus effectively net profit to developers have substantially reduced. If developers have to make margin, sale prices will have to move up. In Pune the sales are slow but steady. Small projects are moving but high-end projects are not moving much in both the cities.”

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