"With the new fund, investors can enjoy both benefits offered by redevelopment and land acquisition investments," said Jijina.
The fund would invest in the five metros and in Nashik, Nagpur and Ahmedabad, he said.
According to reports, Piramal is also looking to raise a $300-million offshore fund to invest in properties.
Piramal's plan to close a $150-million offshore fund by April was delayed as limited partners' investments became slow, Jijina said. After the initial close of $50 million last year, Piramal is looking to raise another $50 million by June this year, he noted.
Piramal joined the likes of ASK Group, Indiabulls which are raising domestic funds. ASK is in the market to raise a Rs 1,500-crore domestic fund as well as a $200-million offshore fund.
Private equity (PE) investments in India's real estate companies rose 85 per cent to Rs 5,168 crore in the January-March 2015 period from Rs 2,800 crore a year ago, according to a report of global property consultancy Cushman and Wakefield.
In February last year, Piramal had signed a $500-million joint venture with Canada Pension Plan Investment Board to offer rupee debt financing. Both the parties committed $250 million each in the joint venture.
Piramal Fund Management will invest up to Rs 5,000 crore ($803 million) before March 2016 to finance construction projects, a Reuters report said recently. Piramal Fund Management manages assets worth $2 billion.