Kumar Builders Eyes $300m PE Funding in domestic and overseas market.

Kumar Builders has postponed plans for initial public offering and know Kumar Builders are in talk with private equity firms to raise around $300 million over 2011-12. The Pune-based real estate firm is creating special purpose vehicles (SPVs) for each of its projects, and plans to sell 26 per cent to PE firms in each SPV.

“Kumar Builders will hive off 26 per cent stake of each project to private equity players for raising the fund.

We hope to complete the process before next fiscal-end,” Lalit Kumar Jain, chairman of Kumar Builders, told Financial Chronicle.

The company is in talks with several PE players both in the domestic market and overseas market for raising funds, according to him.

Jain said the company has postponed plans for IPO for the time being as market sentiment is not that bullish. Kumar Builders, had filed an application for IPO in 2009 to raise around Rs 450 crore in 2009 but later deferred the plans due to adverse market conditions.

The company will launch one residential project in Kalina, one in Vile Parle (East) and another in Ghatkopar, each project counting 100 flats. It will also launch one special economic zone in Hinjawadi, in Pune. The total investment for the projects will be around Rs 1,050 crore, according to Jain.

In February, the company raised $55 million from Dutch equity firm FMO.

"The $55 million which we raised recently will also be utilized for the new residential and SEZ projects that we are launching in the next quarter," Jain said.

There is liquidity crunch in the market and raising funds has become difficult for real estate
companies as banks turned extremely cautious. "These projects are expected to be completed in next seven years," Jain said.next seven years," Jain said.