Citi Bank Private Equity, the private equity division Citibank will invest about $40 million in Indian ICE sector companies over the coming 12 to 18 months. At the same time, the company is also mulling to raise another fund corpus. As per the company's plans, it will either raise a fund with the corpus of $50 million as proprietary money from Citi Bank or will raise $100 million from the market.
"These are the plans we have for the fund at present," said Ajay Relan, India head of Citi Bank Private Equity. He, however, said this would be done once the existing corpus is invested.
It currently manages a $100 million fund which is a proprietary fund and is raised through internal accruals. The fund that began operations in 1996 currently manages a private equity portfolio of $60 million.
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It has already made investments in some of the high-profile Indian IT companies, like Hughes Software, Rediff, Polaris, Dishnet DSL and Eastern Software Systems.
"The bank would invest $40 million in the next 12-18 months in Indian ICE companies," he said on the sidelines of the press conference launching mindzones.com, a talent search website. He also said though entertainment companies are an area of interest for the fund, it has not so far invested in any such company.
According to him, one of the significant investments in the coming months would be in Times of India group's financial portal timeofmoney.com, where the Citibank group would invest about $7.5 million, of which Rs 20 crore would be invested by Citibank and the remaining by IFLEX.
Asked about plans of offloading existing stakes, he said, "The fund has a long-term commitment and would not sell the equity stakes which would currently be valued at Rs 800 crore."
At least seven companies in which the private equity fund has picked up stakes, would hit the market soon. These companies include Rediff, DCM Tech, Newgen and Dishnet DSL. The fund has invested about $5 million in these companies..
Citibank added $50 million to the fund size last year, taking the total corpus of the fund to $60 million. It has already invested in 10 IT companies last year, which is the highest in a year since the fund's inception.