Indian financial institutions are competing with each other to invest in this higher return segment. Some of the prominent companies promoting real estate funds in India are HDFC Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, Kshitij Venture Capital Fund (a group venture of Pantaloon Retail India Ltd) and ICICI’s real estate fund, India Advantage Fund. Regulated under SEBI’s (Securities and Exchange Board of India) Venture Capital Funds, these are closed-ended schemes with an initial public offer (IPO) contributing to a discount on NAVs (Net Asset Value).

The Tata Group has joined hands with private equity firm, Xander, through its group company Trent, in April 2007, to raise $1 bn for an institutional retail real estate fund. India’s top real-estate firm, DLF, has raised $2.24 bn in the country’s largest initial public offering in June 2007. Meanwhile, an HDFC-sponsored real estate fund has been permitted to bring up to $ 790 mn of FDI into the country, while Indiabulls Real Estate (IREL) is looking to raise up to $1.2 bn.