Milestone Capital to go public

Mumbai-based private equity and real estate investment firm Milestone Capital Advisors has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise capital through an initial public offering (IPO) of shares on the Indian bourses.

The company will issue 4,285,715 equity shares, although it is not clear what range the shares will be priced in. The issue will constitute 30 percent of the fully diluted post-issue paid up capital of the company, it said in the prospectus. 

Milestone was unavailable at press time. 

Milestone is also considering a pre-IPO placement of up to 714,200 equity shares to raise up to INR400 million (€7 million; $8.6 million). If completed successfully, the firm will reduce its issue size by the amount raised through the pre-IPO placement (subject to a minimum issue size of 25 percent of the post-issue paid up equity capital being offered to the public).

Part of the proceeds from the capital raising exercise will be used to seed two new funds: one focused on infrastructure and another with a focus on small and medium sized enterprises. The remaining proceeds will be used for the purchase of new office premises in Mumbai and for general corporate purposes, Milestone said.

The target of the infrastructure fund is INR8 billion and the firm has an option to increase the size to INR10 billion. From the IPO proceeds, INR1 billion will be used to seed this fund. The infrastructure fund will focus on investments in Indian infrastructure projects including roads, rails, bridges, ports, airports, water supply, irrigation projects, power, agriculture processing, industrial parks, engineering, construction and telecommunication.

Milestone will use INR500 million of the proceeds to seed its SME-focused fund, which will target commitments of INR3.5 billion with the option to raise another INR1.5 billion. The SME fund will focus on investments in small and medium sized enterprises in sectors including electronics, leather, textiles and automobiles. 

The firm has actively been adding to its portfolio of private funds under management through partnerships and joint ventures. In February this year the firm launched Special Opportunities Fund-I, which is managed by Capstone Capital, a joint venture between Milestone and Money Matters Financial Services. The fund is focused on investments in special situations, with an emphasis on the infrastructure sector and is targeting commitments of INR4 billion.

Milestone, through another joint venture, is also fundraising for Blue Ocean Maritime Fund, which is incorporated as a limited partnership in the Cayman Islands. The fund is targeting commitments of $100 million with a $200 million hard cap and will primarily acquire and operate and maritime vessels before selling them at an opportune time. 

Milestone already manages other private equity, real estate development and real estate yield-driven projects independently and through similar joint ventures with the likes of Religare Venture Capital, Ecofirst and IL&FS.