IL&FS Investment Managers invests $100 mn in real estate startup QVC Realty

IL&FS Investment Managers Limited (IIML), the private equity arm of IL&FS, has invested $100 mn in QVC Realty, a real estate startup, making it the first venture capital-backed real estate start-up in India. QVC Realty is promoted by Prakash Gurbaxani, who was heading the real estate joint venture between Tishman Speyer and ICICI Ventures.

The initial investment has already been deployed to buy a 100-acre plot near Gurgaon. QVC will develop a township on this land in the next three years. Talks are also in an advanced stage for setting up another township of similar size in Bangalore’s periphery. In four years, the combined capital value of the two projects is expected to touch Rs. 3000 crores. The two partners have not yet decided on a fixed profit sharing ratio. However, the management (QVC and IIML) may take their respective stake on delivery of projects. IIML has also committed to partner QVC in all its future real estate projects.

IIML’s investment in QVC will be modular. Depending on the evaluations of the project, IIML will arrive at how much stake will be swapped and the profit sharing ratio. Currently, the equity raised will be used to finance the purchase of land. For the further development, QVC may take the debt route.

Article in DNA Money.

IL&FS PE arm to raise $900 mn this year; may team with Trikona Capital

IL&FS private equity arm IL&FS Investment Managers (IIML) will raise funds worth $900 mn in 2007 for investments in infrastructure, real estate and hospitality.

In addition to raising a $400 mn-proprietary fund, it’s also in talks with the UK-based PE fund Trikona Capital to raise another $500 mn spread over two sector specific funds. Apart from this, IIML will also set up a $1 bn PE fund with Abu Dhabi Investment Corporation for investments in infrastructure. IIML and Trikona Capital already have two sector-specific PE funds for investments in real estate and hospitality. The corpus of these funds is $100 mn each. IIML’s proposed PE funds with Trikona Capital will also be for real estate and hospitality. The corpus of both the sector-specific funds is expected to be $250 mn each.

The proprietary fund that will be raised by IIML will invest only in infrastructure projects in India. The proposed fund would be raised by the company over the next three to four months.

IIML currently manages assets worth $1 bn in several funds and also manages a $56-mn proprietary fund of IL&FS. IIML has deployed $10 mn of its $100 mn PE fund set up jointly with Trikona Capital for investments in infrastructure and real estate. In October last year, the fund invested $9 mn in IL&FS Transportation Networks Limited for a 2.5% stake. The second fund, jointly promoted by IIML and Trikona Capital, is the hospitality fund which has deployed $60 mn of its $100 mn. The $1 bn PE fund with ADIC will make investments in infrastructure assets in West Asia and North Africa. Both ADIC and IL&FS will commit around $50 mn to the new fund.

Read The Economic Times article.
Related Post: IL&FS to float $1 bn PE fund with Abu Dhabi Investment Company

IL&FS Investment Managers to invest Rs. 130 crores in Ansal SPVs

IL&FS’ PE arm IL&FS Investment Managers (IIML) will invest in two special purpose vehicles (SPVs) being floated by Ansal Properties and Infrastructure (APIL). IL&FS will reportedly get 49% equity in the SPVs with an investment of about Rs. 130 crores.

The two SPVs will develop projects in Gurgaon. While the first SPV is being floated for an integrated township, the second SPV will develop an IT special economic zone (SEZ). IL&FS is the second private equity fund to commit investments in an APIL SPV in the last six months. Earlier, HDFC Realty Fund had taken 33% equity in an APIL SPV for developing an SEZ in Greater Noida.

In recent times, APIL has also attracted private equity investment in the holding company by diluting promoters’ stake. The company had raised Rs. 175.8 crores through a 5% private placement with Citigroup in October last. Later, in November, George Soros had bought close to 1% equity in the company for Rs. 25 crores through the secondary market.

Read the article in The Economic Times.

IL&FS, Sabre Abraaj invest Rs. 125 crores into Ramky Infrastructure

Hyderabad-based Ramky Infrastructure Limited has received private equity funding of Rs. 125 crores from IL&FS Investment Managers (IIML) and UAE-based Sabre Abraaj Private Equity Fund I. Rs. 75 crores was put in by Sabre-Abraaj, while Rs. 50 crores was infused by IIML. Members from the two companies will join the board of Ramky. The investment of Rs. 125 crores amounts to 13.5% of equity placed with the two investors while the remaining 84.5% is held by the promoters. About 1.1 mn shares of Ramky Infrastructure have been placed with the investors at a price of about Rs. 1146 per share, taking the EV of Ramky at Rs. 925 crores.

Ramky Infrastructure has been undertaking several BOT projects including roads, highways, industrial parks, irrigation canals and residential projects. The order book position of the company stands at Rs. 2300 crores. The investment will be used to bid for larger construction projects, investment in BOT projects and working capital requirements. The company will also look at the option of entering the capital markets in the next one year to raise funds.

IIML’s investment in Ramky is part of its $1 bn funds planned for the year. Of the $1 bn planned for investment, at least $250 million has been invested in infrastructure firms. This is also the first investment of Sabre Abraaj Private Equity, a 50:50 JV between Sabre Capital Worldwide, Inc. and UAE-based Abraaj Capital. Recently the two investment firms launched the Sabre Abraaj India Private Equity Fund I and the first recipient of funds is Ramky (See Related Post).

Read The Economic Times article.