Cash flow

New Delhi, Sept. 7: The cabinet today allowed the Housing Development Finance Corporation (HDFC), the country’s biggest home mortgage lender, to set up a $720-million overseas fund for investment in the Indian real estate.

HDFC will market the fund among banks, financial institutions, multilateral agencies and high net worth individuals in Europe, North America and Asia.

The approval is expected to bring in FDI worth Rs 3,240 crore in the real estate sector.

The Mauritius-registered and HDFC-sponsored India Offshore Real Estate Investments will invest $720 million, raised overseas, in units issued by the HDFC International Real Estate Fund (IREF).

IREF would, in turn, invest in Indian companies, an official spokesperson said after the cabinet meeting.

The rules on FDI in real estate will apply to the fund, including an embargo of three years on the repatriation of original investment.

The cabinet has also allowed the HDFC-sponsored fund to raise $30 million (nearly Rs 135 crore) from the domestic market.

Property funds are keen to join the real estate boom riding on the back of an 8 per cent growth of the economy.

The ‘Series A’ units that India Offshore Real Estate Investments would subscribe to will have a face value of Rs 1,000 each.

When news of the overseas fund reached the BSE, the HDFC scrip shot up 3.1 per cent to touch Rs 1,352.75.

Cabinet on coal

The cabinet committee on economic affairs (CCEA) today approved outsourcing of up to 20 million tonnes (mt) per annum of coal from the Bharatpur open-cast mines in Mahanadi Coalfields.

It also cleared simultaneous floating of tenders to outsource incremental overburden removal corresponding to 9 mt additional coal production for a longer duration of 10 years, an official spokesperson said.

The CCEA gave its approval to a Rs 1,389-crore proposal to convert the rail bridge over Ganga in Patna to a rail-cum-road bridge. The project will be completed in five years.