Tata Housing is currently in preliminary discussions with two private equity funds, Sequoia Capital and Atlanta Equity, aiming to secure financial support for its range of affordable housing initiatives. This move indicates a positive trend, suggesting these PE investors are inclined to re-enter real estate projects that show promising customer demand and reduced risk.
According to sources familiar with the situation, Sequoia and Atlanta have initiated conversations with the Mumbai-based real estate firm to acquire minority stakes in its ongoing low-cost housing project located in Boisar, near Mumbai, alongside three additional affordable housing ventures set for launch.
The interest from these two private equity firms stems from the perceived safety and solid returns of Tata’s housing projects. An insider mentioned that these PE players anticipate returns ranging from 20% to 30% in these undertakings.
Sequoia Capital has allocated approximately $1.8 billion of its total fund size of $10 billion to investments in India. Should a partnership with Tata Housing be finalized, it would mark Sequoia's inaugural foray into the real estate sector. Similarly, Atlanta Equity, a $109 million fund established in 2007, might follow the same path.