Housing Development Finance Corporation on Wednesday announced its foray into the real estate fund business by launching 'HDFC Property Fund' in association with the State Bank of India.
The venture capital fund, approved by market regulator SEBI, will invest in equity and equity-linked instruments of companies engaged primarily in real estate in major cities in India, HDFC informed the Bombay Stock Exchange.
A trustee company -- HDFC Ventures Trustee Company - and an asset management company -- HDFC Venture Capital - have been incorporated for the fund.
The fund's initial scheme, HDFC India Real Estate Fund, is for domestic investors and has a target corpus of Rs 750 crore (Rs 7.5 billion) with a greenshoe option of Rs 250 crore (Rs 2.5 billion). This would be a seven-year close-ended fund, which would be privately placed.
The scheme would have a minimum contribution of Rs 5 crore (Rs 50 million) per investor and would target banks, insurance firms, corporates and high networth individuals for investment.
HDFC managing director Keki Mistry said "The Venture Fund is an extension of HDFC's core business and a value add to its bouquet of services in the real estate sector."
HDFC Senior General Manager K G Krishnamurthy would be the CEO and managing director of the fund. To achieve a balanced risk-reward profile, the inaugural scheme, HI-REF, will invest in three broad classes of companies.
One of these are projects which are complete and investment in them would denote steady income type characteristics, HDFC said.
The second category is the projects in the development stage where the lead-time to commercial deployment is typically between 1-3 years and the completed projects subsequently would have contractual off-take arrangements in place.
The fund would also invest in projects in the planning stage, where the lead-time to commercial deployment would be 3-6 years. These projects would offer the highest amount of return although with a greater risk, HDFC said.
© 2025