Mumbai: India’s only listed domestic private equity (PE) fund, Pune-based IndiaCo Ventures Ltd (IVL), plans to list three of its subsidiaries in the next two years, a top official has said.
Rahul Patwardhan, vice-chairman and managing director of IVL, said the firm intends to separately list IndiaCo Telecom Ltd, or ITL, a 100% subsidiary floated last year to hold the firm’s telecom assets, as well as two newly formed subsidiaries, IndiaCo Global Opportunities Fund, or IGOF, and IndiaCo Clean Energy, or ICE.
IVL manages around $15 million (Rs70.4 crore) worth of proprietary money and was one of the early investors in Geodesic Information Systems Ltd, a Mumbai-based instant messaging and e-business solutions provider.
According to the Bombay Stock Exchange’s website, the investor category called “public” held 63.4% of IVL’s stock at the end of the first quarter of the current fiscal year.
While a listed PE fund may not be familiar to Indian investors, it has gained limelight globally since Blackstone Group, one of the largest buyout funds in the world, raised $4.75 billion in its initial public offering (IPO) in June 2007.
Another large US-based PE firm, Kohlberg Kravis Roberts and Co., had filed its IPO documents with the US Securities and Exchange Commission in July 2007 for an estimated $1.25 billion, but that is yet to see the light of day. Both funds are active in India, as is 3i Group Plc., Europe’s largest publicly traded fund.
In India, retail king Kishore Biyani-promoted PE fund, Future Ventures India Ltd, had filed its draft offer document with markets regulator Securities and Exchange Board of India in February. Earlier this month, The Economic Times reported the public issue has received regulatory approval with some riders. In India, a company can open its issue up to six months after approval.
“We know that our model is not understood by many of the retail investors. That’s why most of the public who hold our stock are friends of the company who understand what we are doing,” said Patwardhan.
IndiaCo was set up in 2000 and went public in 2006 by acquiring another listed entity, Shivaji Securities Ltd, and renamed the new entity IndiaCo Ventures Ltd, to which it moved most of its businesses.
The share price of IVL reflects the gains and losses of IVL’s proprietary PE portfolio, fees charged for advising other funds, and the so-called “carry”, or share of profits it derives when these funds exit investments. IVL shares closed at Rs502.70 each on Friday.
Its subsidiary ITL currently holds two of IVL’s investee companies—Bangalore-based wireless data service provider Verity Technologies Pvt. Ltd and Pune-based Info Dynamics Telesystems Pvt. Ltd.
Patwardhan said ITL will dilute some equity—not more than 49%—to raise $15-25 million from niche investors in six months. These funds will likely be used to purchase, preferably, a controlling stake, in five other mobile value-added services firms.
IGOF, will invest in firms involved in manufacturing and heavy engineering, precision engineering, advanced hi-tech engineering, defence, chemicals and renewable energy. It is raising $250-300 million in six months from investors based in the US and Europe.
ICE is being formed to acquire equity in manufacturing so the parent firm can bring them all on a single platform to build “viable, efficient, renewable and clean and environment-friendly energy sources”, says IVL’s annual report.