Financial services company Toro Investment Managers is looking to raise a real estate Alternative Investment Fund (AIF) amounting to Rs 1,600 crore, marking the maiden fund of its kind to be established within the Special Economic Zone of India’s offshore hub, Gujarat International Finance Tec-City (GIFT City).
Apart from being the first real estate AIF domiciled in GIFT City, the fund also assumes significance as it will be making investments only in projects in this offshore hub. The fund will be deployed across segments including commercial, residential properties and social infrastructure.
“GIFT City is emerging as a key destination that will help boost the financial strength of the Indian economy. As we usher in this era of financial excellence, we are looking to attract global investors to explore the boundless opportunities that GIFT City and the International Financial Services Centre (IFSC) present. Together, we aim to shape the future of global finance,” Jaxay Shah, Founder Chairman, Toro Investment Managers, told ET.
The dollar-denominated fund will have a tenure of seven years and two extensions of two years each. The proposed fund raising of Rs 1,600 crores included a greenshoe option of Rs 800 crore. The fund is expected to be raised from institutional investors, family offices, high networth individuals (HNIs), and non-resident Indians (NRIs).
“We are witnessing robust growth in the establishment of AIFs within the IFSC. The fund ecosystem here now encompasses AIFs, fund managers, Portfolio Management Services (PMS), investment advisers, and fund administrators. The conducive regulatory framework, competitive tax regime, and cost-effective operations are drawing global fund structures to the GIFT IFSC,” said Dipesh Shah, Executive Director (Development) at International Financial Services Centres Authority (IFSCA).
The fund received IFSCA’s approval on Tuesday.
Notably, this is the one of the first fundraising being undertaken after the recent clarification on tax regulations related to NRIs. Through a clarification in July, the Central Board of Direct Taxes (CBDT) said that income generated by non-resident investors from offshore investments routed through an AIF established in an IFSC will be exempt from taxation.
As per this, NRI investors in AIFs in the GIFT City will be exempted from filing the income tax return. These investors are also not required to have a PAN number to invest in AIFs in the IFSC.
The launch of this maiden alternative investment fund for the investment in real estate of GIFT City is supported by Vistra India, an IFSCA registered intermediary that has played a pivotal role in bringing global funds into India.
GIFT City has been fast emerging as a financial hub that has attracted large entities in the fintech sector globally. It is already home to more than 500 entities including aircraft, ship leasing, fintech companies, banks, funds, and stock exchanges.
It is already home to global technology companies such as Google, IBM, and Oracle, apart from at least 35 fintech companies, two international stock exchanges, and over 60 alternative investment funds. It is also home to India’s first bullion exchange with over 100 qualified jewellers on-board.
The master plan for the expansion of the GIFT City to over 3,300 acres along with vibrant social infrastructure from current 886 acres is in the final stages of completion and is likely to be submitted by Gift Urban Development Authority to the Gujarat government’s Urban Development Department in the next few weeks.
The second phase development plan with town planning schemes around the GIFT City is expected to be unveiled after the state government’s review and feedback from the public as per the statutory requirements.
