IL&FS eyes partial exit through Ramky IPO

IL&FS Investment Managers plans to sell part of its stake in Ramky Infrastructure's proposed IPO, through which the company intends to raise INR4bn.

Ramky Infrastructure, a Hyderabad-based integrated construction, infrastructure development and management company, has filed its draft red herring prospectus with the Securities & Exchange Board of India to list its shares on the Bombay Stock Exchange and the National Stock Exchange.
The company is looking to raise INR4 billion (€66 million; $89 million) through an initial public offering (IPO), it said in a statement.
IL&FS Investment Managers, which is the private equity arm of India’s Infrastructure Leasing & Financial Services and an investor in Ramky, will look to sell part of its stake through the IPO. The firm invested INR500 million in Ramky for a 5.4 percent stake in December 2006 from Tara India Fund III, a $225 million vehicle. 
It now plans to offer 30 percent of its stake in Ramky Infrastructure in the proposed IPO, Archana Hingorani, chief executive officer and executive director of the firm, told PEI Asia.
Ramky Infrastructure is also backed by Sabre-Abraaj, the joint venture of Dubai-based Abraaj Capital and Sabre Capital, which invested INR750 million in Ramky for an 8.1 percent stake at the same time as IL&FS Investment Managers.
Ramky Infrastructure is a construction company focused on civil, environmental and urban infrastructure. It constructs roads, highways, industrial buildings, irrigation canals and water supply and drainage systems. The company has also invested in an industrial part and in housing projects on a build-operate-transfer basis.
The proceeds from the company’s IPO will be used to invest in the company’s road, medicinal park, food park and jewellery park subsidiaries, to purchase construction equipment and to fund a part of the company’s working capital requirements, the company said.
In June 2009, the Standard Chartered IL&FS Asia Infrastructure Growth Fund, an infrastructure fund managed jointly by IL&FS and Standard Chartered Bank, invested INR1.4 billion in Ramky Enviro Engineers, a waste management-focused affiliate of Ramky Infrastructure and part of the same group of companies.