JM Financial Fund II buys stake in co-living operator Isthara Parks

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New Delhi | Published: June 25, 2019 3:18:13 AM

The quantum of stake acquired by the fund is not yet clear but sources in the know indicated it is a significant minority stake.

jm financial funds, IstharaThe investment in Isthara marks the closing of the fourth investment by JM Financial India Fund II.

JM Financial Private Equity’s second fund — JM Financial India Fund II — has finalised an investment in Coimbatore-based co-living operator Isthara Parks to fund the firm’s expansion plans, wherein the fund will be investing close to Rs 40-50 crore in tranches, said two people aware of the development.

The quantum of stake acquired by the fund is not yet clear but sources in the know indicated it is a significant minority stake.

Isthara provides fully furnished, shared accommodations for working professionals and students, along with a host of amenities such as daily meals, WiFi internet, gym, laundry and housekeeping service, etc. In addition, the firm organises community-focused events on a regular basis to promote co-living amongst residents.

The rentals vary according to the type of accommodation. According to Isthara’s website, rentals for a triple sharing room starts from Rs 8,500 per month onwards while that for a double sharing one starts from `11,000 onwards. Rental for a single room starts from Rs 15,000 per month onwards.

The proceeds from the investment will support expansion of the firm in existing markets Hyderabad, Bengaluru and NCR initially, as well as in other key cities in Asia thereafter.

The investment in Isthara marks the closing of the fourth investment by JM Financial India Fund II. JM Financial India Fund II is a sector-agnostic, growth-capital private equity fund set up by JM Financial, which invests in high-growth, small-to-mid-market companies in financial services, consumer, IT / ITeS, infrastructure services and manufacturing sectors.

Also read: Unpaid obligations: NAV of debt mutual funds falls due to interest delays by DHFL

Prior to the latest investment, the fund has made investments in India Home Loan, an affordable housing company, Spandana Sphoorty Financial, an NBFC-MFI, and Vendiman, a vending solutions provider, according to information provided on JM Financial PE’s website.

Co-living spaces is increasingly garnering attention from private equity players as well as strategic investors. In December 2018, Lemon Tree Hotels had announced about its joint venture with an affiliate of Warburg Pincus to create a co-living platform. Similarly, last year mortgage lender HDFC had invested `70 crore to buy a 25% stake in Good Host, a firm that manages student housing facilities.

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