A fund managed by HDFC will invest about Rs 200 crore ($41 million) in one of the projects of New Delhi-based real estate developer ATS Infrastructure, two sources with direct knowledge of the matter said.

The investments from HDFC would be for the developer's Gurgaon project near the national capital, said the sources, who declined to be named as the talks were private.

ATS did not return e-mail seeking comments, while HDFC did not comment.

ATS is building two large residential projects in Gurgaon with an investment of over Rs 540 crore. The company plans to complete the projects in three years, said the sources.

HDFC group has significant exposure to the country's real estate sector with a $800 million dedicated real estate fund. In addition, its portfolio management services and a fund managed by HDFC Bank invest in property projects.

Private equity investment in Indian property is down slightly during the first nine months this year, to about $784 million, from $817 million at the same time last year, data from VCCircle.com, an industry tracker, showed.

Domestic fund houses including Kotak Real Estate Fund, IndiaReit and ASK Investments are all in the process of raising funds totalling about $1 billion, fund officials have said.