Kotak Realty Fund, a unit of Kotak Mahindra Bank, has raised Rs 523 crore from domestic investors that has been mainly earmarked for the real estate sector.
The fund proposes to invest in high-yield debt instruments, such that the investments generate regular returns over the life of the fund. Given the demand potential, residential projects would be the primary focus of investment followed by commercial properties, Kotak Realty said in a statement.
A majority of investors in the new fund are existing investors of Kotak Realty Fund's previous funds.
"In a challenging fund-raising environment, we are gratified to see the confidence that both existing and new investors have placed in our funds based on our strong track record. The financing constraints facing the real estate sector will help provide the funds with attractive investment opportunities and we expect deal flow activity to remain robust," Vikas Chimakurthy, Director, Kotak Realty Fund said.
Kotak Realty Fund, which has exited investments worth Rs 1,200 crore ($233 million) till date, currently has a total of Rs 3,500 crore ($700 million) assets under management across five funds.
Indian developers have come under pressure in recent months as rising interest rates deter buyers, even as it becomes more expensive for builders to access funds.