LIC Housing Finance, the mortgage arm of Life Insurance Corporation of India (LIC), is set to foray into the venture capital arena. It intends to start Rs 500 crore real estate fund by the end of this financial year.
LIC Housing Finance is reportedly scouting for a banking partner for raising capital and will soon approach SEBI to set up an asset management company. To invest in listed companies, companies usually register with SEBI.
Based on the response to the real estate fund, the company will decide on whether it will expand its presence in the venture capital space.
There are at least three major banks in the fray for a tie-up and a memorandum of understanding will be signed soon. While LIC Housing Finance would be the promoter of the real estate venture fund, LIC could also be one of the internal contributors of the fund.
LIC Managing Director Thomas Mathew said the insurer has no plans to directly enter the private equity or venture capital businesses.
The fund proposed by LIC Housing Finance will be used to finance real estate development and about fifty-sixty projects are likely to be funded over twelve to eighteen months.
A large number banks and finance companies have recently entered the venture capital space and the existing players are expanding their footprints.
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