Chennai, Sep 4 (IANS): The Mumbai-based Milestone Capital Advisors, an alternative investment advisory firm, plans to raise Rs.500 crore fund for lending to residential real estate projects in five markets, said a company official Thursday.

"We are in discussions to ink funding deals amounting to around Rs.300-400 crore and hence we would like to raise Rs.500 crore at the earliest. We will be committing Rs.15 crore and the Tata group Rs.10 crore," executive director Navin Kumar told IANS here.

The proposed fund will be the company's 10th fund and is named Milestone Opportunities Fund 10.

According to Kumar, the investors in the fund will be corporates, high net worth individuals and others.

Based on the need, the company may decide on increasing the corpus size by another Rs.200 crore, he said.

He said it will be purely a debt fund and lending will happen to real estate projects in Mumbai, Pune, the National Capital Region (NCR), Bangalore and Chennai.

Nearly 30 percent of the funds raised through this new fund will be invested in Chennai market and the projects have been identified.

The fund will be of short tenure of around 3.5 years. The objective is to generate regular income through coupon payouts while providing potential capital appreciation on exit.

According to Kumar, the company has floated completely debt fund as well as equity-cum-debt funds.

"We do not have any loan delinquencies or complete erosion of capital," he said.