Less than a year after it received Rs 1,000 crores as investment from its parent firm, Tata Realty and Infrastructure Ltd is refunding Rs 800 crores to Tata Sons Ltd at a time when the group is hard-pressed to raise funding related to past acquisitions and expansion. The step, taken after Tata Realty decided to pull back some of its planned projects amid a downturn in the real estate market, will reduce its paid-up capital to Rs 925 crores from Rs 1,725 crores, according to a business daily.

“At the moment, we are well capitalised,” said Sanjay G. Ubale, MD and CEO of Tata Realty, confirming that the refund had been approved by the Bombay High Court. While seeking approval from shareholders for the refund, the firm had said that “in view of the significant downturn in the real estate markets, the company has now decided to shelve/reduce the size of some of its proposed projects, resulting in reduced fund requirements.”

Tata Sons had invested Rs 1,000 crores in its closely held realty unit in March through a 5% non-cumulative convertible preference share issue of Rs 10 for cash at par. Tata Realty had embarked on major projects, including IT parks and SEZs. It also planned to jointly develop real estate with group firms such as Tata Consultancy Services Ltd and Indian Hotels Co Ltd. According to Ubale, some of these projects would be financed through the $750 million (Rs3,690 crores) offshore fund, Tata Realty Initiatives Fund-I, that the company is managing.