How It Works
Understanding our investment process and structure
Business Model
Our structured approach ensures transparency, security, and optimal returns for all investors. Here's how the investment process works:
Capital Pooling
Raise capital from a closed group of investors. This collective approach allows smaller investors to participate in premium land assets that would otherwise be out of reach.
Land Identification & Due Diligence
Identify land parcels with high appreciation potential, clear titles, and minimal legal encumbrances. A dedicated legal and technical team will verify all land records (via Dharani portal/AP land records), zoning regulations, and conversion status to ensure complete transparency and security.
Acquisition
Purchase the land in the name of the LLP (the investment vehicle). This legal structure provides protection and ensures proper asset management.
Asset Holding & Value Accrual
Hold the land asset securely. Minimal active management is required. The primary value driver is the organic appreciation driven by regional development, infrastructure growth, and market dynamics.
Strategic Exit
Sell the land parcels in bulk to developers, corporations, or through plotted development after a pre-defined period (4 or 6 years) when market prices have met our target returns. The exit strategy is planned to maximize returns while minimizing risk.
Profit Distribution
Upon sale, the net proceeds (after all expenses) will be distributed to investors proportionally to their Investment Units. This ensures fair and transparent returns based on each investor's contribution.
Capital Raise Plan
Phase 1 (Immediate)
Target a first close with a small group of anchor investors to acquire the first land parcel. This initial phase establishes the foundation of the fund and demonstrates commitment to the investment strategy.
Phase 2 (Ongoing)
Open for additional investors to join subsequent land acquisitions, with the same unit price of ₹10 Lakh/unit. This phase allows for continued growth and diversification of the land portfolio.
Total Capital Raise: The fund can have a target corpus (e.g., ₹5 Crores, ₹10 Crores) or be open-ended for a specific period, providing flexibility to accommodate investor demand and market opportunities.
Use of Funds (Capital Allocation)
Transparent allocation of capital ensures maximum efficiency and investor confidence. Here's how funds are utilized:
85%
Direct land acquisition costs
5%
Legal, Due Diligence, and Registration Fees
5%
Fund Management & Administrative Costs (including property tax, basic maintenance)
5%
Contingency Fund for unforeseen expenses
Fund Structure & Management
Legal Vehicle
The fund is proposed as a Limited Liability Partnership (LLP). This structure provides:
- Legal structure and protection
- Limited liability for investors
- Tax-efficient operations
Roles & Responsibilities
Promoting Partners (General Partners)
A core management team designated as General Partners will be responsible for:
- Overall fund management
- Land identification and acquisition
- Legal due diligences
- Executions, ongoing maintenance, involvement in day-to-day management
- Exit strategy
The General Partners shall have full authority to act on behalf of the LLP in accordance with the provisions of the operational agreement.
Investors (Limited Partners)
Investors shall be admitted to the LLP as Limited Partners and shall contribute capital in accordance with the terms of this Agreement. Limited Partners shall be entitled to participate in the profits, losses, and distributions of the LLP in proportion to their respective Investment Units.
Limited Partners shall not take part in the day-to-day management or operations of the LLP and shall have no authority to bind the LLP, except as expressly provided under the operational Agreement or required by applicable law.
Management Fee Structure
Upon the sale, cash-out, or any other disposition of the Assets, the Management shall be entitled to a management fee equal to fifteen percent (15%) of the net proceeds realized, after deducting all applicable taxes, expenses, and liabilities related to the transaction.
Definition of Net Proceeds:
The term "Net proceeds" shall be defined as the gross proceeds from the sale or disposition of the Assets, less all transaction-related costs, including but not limited to:
- Taxes
- Legal fees
- Any encumbrances on the Assets
Agreement: This fee structure and the method of calculation and payment shall be clearly detailed and binding in the LLP Operational Agreement.
Risk Analysis & Mitigation
We believe in transparent communication about potential risks and our comprehensive strategies to mitigate them. Understanding risks is crucial for making informed investment decisions.
| Risk | Mitigation Strategy |
|---|---|
| Market Risk (Prices don't rise) |
Focus on a high-growth micro-location with tangible infrastructure projects. A longer 6-year plan provides a buffer. |
| Liquidity Risk | This is a closed-end, illiquid investment. The exit is planned only after 4/6 years. Investors must be aware of the lock-in period. |
| Title & Legal Risk | Comprehensive due diligence by a specialized legal team. Purchase only lands with clear, marketable titles and necessary approvals. |
| Regulatory Risk | Stay updated on AP land laws and zoning regulations. Work with local legal experts. |
| Execution/Delay Risk | Built-in contingency fund. Flexible exit strategy to hold longer if market conditions are not optimal at the 4/6-year mark. |
Exit Strategy
We have structured flexible exit options to accommodate different investor needs and market conditions. Our exit strategy is designed to maximize returns while providing options for investors.
A. Primary Exit – Asset Sale
The primary exit strategy shall be the sale of the land asset as a whole (bulk sale).
The Fund Manager will actively identify and engage potential buyers, including but not limited to:
- Real Estate Developers
- Industrial Corporations establishing operational units
- Non-Resident Indians (NRIs)
- Institutional Investors
Approval Process: Any sale offer shall be subject to approval by a majority vote of the investors, calculated based on the Investment Units held. Upon such approval, the Managing Partners shall have the authority to finalize and execute the decision.
B. Cash-Out Exit (Partial Exit by Members)
In the event that a majority of investors wish to retain ownership of the property in anticipation of future appreciation, any investor opting to exit may do so through a cash-off exit mechanism.
- Valuation: The exiting investor shall be paid the prevailing market value of their proportionate holding as of the date of exit.
- Funding: The payout shall be funded by the remaining investors who choose to retain the property, in proportion to their Investment Units or as mutually agreed.
Fund Distribution
Transparent and fair distribution of proceeds ensures all investors receive their rightful returns based on their investment contributions.
Distribution Process
Upon completion of the asset sale or a cash-off exit, the net proceeds shall be distributed to the General Partners or their nominated beneficiaries in proportion to their respective Investment Units, after deducting applicable management fees and expenses.
Currency & Transfer Policy
- All distributions shall be made exclusively in Indian Rupees (INR).
- No transfer of funds outside India and no conversion to foreign currency (including USD) shall be permitted under this structure.