IFC to Invest $150 Million in HDFC Capital Real Estate Fund

The International Finance Corporation (IFC), part of the World Bank Group, has committed up to $150 million to the H-DREAM Fund, as per the news reports. The fund is managed by HDFC Capital Advisors, a subsidiary of HDFC Group focused on real estate private equity. It aims to support housing projects in the affordable and mid-income segments.

Fund Size and Structure

The total targeted size of the fund is $1 billion. This includes a base capital raise of $500 million and a greenshoe option of an additional $500 million. IFC’s anchor investment is expected to help mobilise up to $850 million from other institutional and private investors.

The fund is expected to support the development of at least 25,000 residential units. These will be built to meet EDGE (Excellence in Design for Greater Efficiencies) green building standards. The focus is on projects in urban areas, particularly Tier-I and Tier-II cities.

Addressing Housing Shortage

India has a housing shortfall of about 18 million units in Tier-I and Tier-II cities. The fund aims to contribute toward easing this gap through early-stage project financing. The strategy includes tackling supply-side issues in the real estate sector.

HDFC Capital has secured early in-principle commitments of around $350 million for the fund. These commitments have come from domestic institutions, global investors, and Indian family offices. Additional funding is being sought to reach the overall corpus target.

Past IFC Activity in Real Estate

IFC has previously worked with Indian developers such as Birla Estates and Sunteck Realty. These collaborations have focused on affordable housing with an emphasis on sustainability, and included both equity and debt support.

Read More: HDFC Bank vs ICICI Bank: A Quick Comparison of Q1FY26 Financial Performance!

Conclusion

The H-DREAM Fund is structured to bring long-term capital into India’s affordable housing sector, with a focus on sustainable development practices. It is expected to support both housing supply and green infrastructure goals in urban regions.

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