INVESTMENT CASE STUDY

Sobha International City, G-99 & The Hills

A residential land-parcel investment across two of India's fastest-growing corridors, Dwarka Expressway (Gurgaon) and Nandi Hills (Bangalore) — structured as optionally convertible debt into QVC Realty Developers.

At-a-Glance

QVC Realty Developers Pvt. Ltd.Company

March 2019Initial Investment Date

INR 200 CrCommitted / Invested

19%IRR

Fully ExitedStatus

1.77xGrowth Multiple

The Opportunity

In early 2019, the fund evaluated a set of land-bank plays across NCR and Bangalore's peripheral growth corridors. Several outright land-acquisition structures were examined and set aside — the capital intensity and entitlement risk of raw land didn't clear the bar. What survived diligence was a structured debt position into an established developer already holding entitled, part-developed land across three parcels — giving the fund downside protection through a debt instrument while retaining upside optionality through the convertible feature, without taking on direct development or execution risk.

The scale (339 acres combined, 3.7 mn sq. ft. of saleable area attributable to the fund's partner) and the corridor selection — Dwarka Expressway and Nandi Hills, both benefiting from infrastructure-led appreciation — were central to the thesis.

Rationale

Most distributors approaching real estate private equity default to pure-equity development plays — full exposure to execution and cycle risk in exchange for uncapped upside. This structure offered a different risk-reward: debt-like protection with equity-like optionality, deployed against a developer with entitled land already in hand rather than raw acquisition risk. The dual-corridor exposure (NCR + Bangalore) meant the outcome wasn't dependent on a single city's demand cycle. The realised 19% IRR at 1.77x validates that the structure did what it was designed to do — protect capital while still capturing real estate cycle upside.

19%

IRR realised on exit

339

Acres across two growth corridors

3

Land parcels held by one developer

1.77x

Multiple on capital invested

Mechanics

Structured as Optionally Convertible Debentures — a hybrid instrument giving the fund:

Fixed coupon / debt-like downside protection

Fixed coupon / debt-like downside protection during the holding period

Conversion option

The option (not obligation) to convert into equity if project value appreciation made that more attractive than a debt-only return

Priority in capital stack

Priority in the capital stack relative to the developer's own equity, reducing exposure to project-level execution risk

Risk Factors: Managing the Downside

Developer concentration:All three parcels sat with a single developer group (QVC Realty). Managed through cross-collateralization — the INR 200 Cr was deployed as one tranche against all three parcels, so no single site's underperformance could impair the full position.

Title and encumbrance risk:Returns depended on clear, lien-free title across all three parcels. Managed upfront through diligence, by selecting entitled, part-developed land rather than raw acquisition where title risk hadn't already been cleared.

Execution and approval risk:Launches depended on entitlement and infrastructure timelines outside the fund's control. Managed by structuring the investment as debt — the fixed coupon accrued independent of launch timing, so delays didn't stall the return.

Real estate cycle risk:A multi-year hold carried exposure to demand-cycle swings. Managed through dual-corridor exposure — NCR and Bangalore together — so the outcome wasn't tied to any single city's cycle.

Liquidity: A private instrument with no interim exit until maturity or conversion. Managed by underwriting to hold-to-maturity from day one, with the fixed coupon designed to deliver the base return without an early exit.

Track Record

The investment has been fully exited, returning INR 354 Cr against INR 200 Cr invested — a 1.77x multiple at a 19% IRR over the holding period. The debt-first structure delivered the intended downside protection while the eventual exit captured the appreciation thesis playing out across both corridors.