In India’s real estate sector, the trajectory of private equity (PE) is impressive, akin to the soaring skyscrapers populating its skyline. Over just the first five months of 2008, commitments from PE in Indian real estate firms have eclipsed the total investments recorded for all of 2007, tallying up to an impressive $3 billion. According to experts, the enthusiasm for PE funding is anticipated to escalate in the latter half of the year, presenting an opportune moment for investors amid prevailing liquidity challenges and depressed valuations among various real estate entities. They foresee even a further decline in valuations, potentially by 20%. Nonetheless, as private equity continues to flow into the marketplace, apprehensions linger among investors regarding the execution capabilities of numerous developers involved. The real estate landscape since January has not favored market growth. The plummeting real estate stocks followed the stock market’s downward trajectory beginning in January. Numerous real estate firms have been grappling with liquidity shortages, creating a favorable environment for private equity funds to capitalize. These conditions signify an ideal time to finalize existing deals and explore new opportunities at more attractive valuations. Jagdeep Pahwa, director at India Investment Management, highlighted that many deals that reached closure this year likely commenced negotiations in the preceding year. For instance, a significant $150 million deal with Maytas Properties was finalized in February 2008, though discussions had been ongoing since the third quarter of the previous year. Pahwa further noted, “Earlier, people could tap debt as well as the public market, both of which have dried up today. PE is today more available versus the other two. Deals that are happening today have a higher component of preferred returns which offer a form of downside protection to the investor.”