The warehouse brawl that hit an SM Reit

Strata, one of India's largest fractional real estate platforms, has surrendered a crucial licence following a dispute with its builder-partner over a project in Tamil Nadu, as well as allegations of a company executive impersonating a regulator.

- Neil Borate & Madhurima Nandy

The Securities and Exchange Board of India (Sebi) on Wednesday said Strata has surrendered its small and medium real estate investment trust (SM Reit) licence, and cautioned investors about the dispute over the company's project in Hosur. Strata had not launched any SM Reit scheme under the licence, Sebi said in a post on social media platform X.

A Strata spokesperson said the company had voluntarily surrendered its SM Reit licence without admitting or denying any wrongdoing, and that it intended to apply for a fresh licence after the litigation is concluded.

The Hosur warehouse project, launched in 2020-21, was developed by Avigna and funded through multiple rounds by Strata's fractional real estate investors. However, disputes cropped up between Strata and Avigna, according to persons familiar with the matter who have invested in Strata Reit projects.

Strata founder Sudarshan Lodha obtained anticipatory bail from the Madras High Court on 22 April, amid allegations that a company official had impersonated a Sebi officer to get information from Avigna. Mint has seen a copy of the bail order.

Strata raised money for various portions of the project, Avigna Industrial Parks in Hosur, over the past few years. While several tranches were sold over time, two key components—Box 6(c) and a planned mezzanine floor—faced issues. Box 6(c) and mezzanine floor are separate warehouses within the overall project.