Wagholi Apartment Project: Restructuring A Private Equity Investment In Real Estate

Karan Bhanot; Shridhar Sethuram

Product #:ISB-259

Supplier:Indian School of Business

Discipline:Finance

Setting:2019

Details:Case (PDF) • 14 pages • 2022-01-10

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Business services sector

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This case is written from the perspective of a decision-maker at a private equity investment fund. The case is set in India, where a large corpus of capital sourced from the United States was deployed from the early 2000s onwards. It looks at the manner in which a private equity real estate fund evaluates the implications of RERA in India, in particular, the continuation vs. exit decision when a project encounters obstacles that delay its completion.

Learning Objectives

1) To understand how the regulatory framework interacts with execution risks to amplify the risk profile of a real estate project; and 2) To understand how RERA alters the costs associated with the choice set faced by investors when a project faces impediments that delay its completion.