ICICI Prudential Asset Management Company (AMC) is raising a ₹2,000 crore residential development fund focused on Mumbai and the Mumbai Metropolitan Region (MMR), as sustained housing demand and redevelopment activity create new opportunities in established locations.
The ICICI Prudential Residential Development Fund will have a green-shoe option of ₹1,000 crore and a tenure of six years. Structured as a close-ended Category II Alternative Investment Fund (AIF), the fund is targeting a gross internal rate of return (IRR) of around 20–25%.
The fund will primarily invest in residential projects across the MMR, with a focus on prime micro-markets where availability of land for greenfield development is limited. Redevelopment of existing housing societies is expected to form a major part of its investment strategy.
According to Rohit Rathi, Principal – Real Estate Business, ICICI Prudential AMC, demand for residential projects by established developers continues in Mumbai. He said the fund is evaluating development and redevelopment opportunities while addressing the requirement for upfront capital, adding that the initial response to the fundraising has been robust.
Mumbai’s redevelopment market has expanded as land availability becomes increasingly constrained in established neighbourhoods. More than 1,100 society-level redevelopment agreements were recorded between 2020 and 2025, unlocking around 432 acres of land.
Redevelopment projects require significant funding even before construction begins. Developers may need capital for society payouts, transit accommodation, premiums, approvals and other pre-construction expenses. Traditional lenders such as banks and NBFCs generally participate at a later stage through construction finance.
The new fund is positioned to address this early-stage funding requirement and provide capital to residential development and redevelopment projects. Its focus on established Mumbai micro-markets reflects the growing role of redevelopment in adding housing supply where large parcels of undeveloped land are difficult to secure.
The initiative also highlights the increasing participation of institutional capital in Mumbai’s residential redevelopment market, particularly as developers seek funding structures that can support projects from their initial stages through construction.
