Exposure to real estate investments makes the latter an attractive buyout target.
Milestone Capital, which is looking for potential buyers after its founder Ved Prakash Arya died in a freak accident two months ago, has found another suitor, Piramal Group.
According to earlier reports, Dewan Housing, Religare and IL&FS have already evinced interest for buying out Milestone Capital, which lost Arya, its managing director and CEO, on August 25, when a tree fell on him while the 42-year-old entrepreneur was on a morning walk near his home.
Sources familiar with the developments said Milestone’s exposure to real estate investments has made it an attractive buyout target for the Ajay Piramal-owned company which also had substantial exposure to the sector. Piramal is also keen on Milestone’s funds in healthcare, where the group is an established player.
Last week, Piramal Healthcare’s board of directors decided to seek shareholders’ approval for the company’s plan to undertake “new business opportunities “. Milestone has already appointed Standard Chartered Bank to find potential buyers.
A Piramal Group spokesperson, when contacted today, said the company does not want to comment on market speculations. Milestone’s response, too, was similar. “We would not like to make any comment whatsoever on the same, “ its spokesperson said.
Milestone, through its JV with Religare-Milestone Religare, runs two PE funds —a Rs 450-crore domestic fund and a $250-million offshore fund-under India Build-Out Fund — for investments in healthcare and education sectors. It invested in IMS Learning Resources, CARE Ratings and Krishna Institute of Medical Sciences.
In the real estate space, Milestone runs four funds including three domestic funds with a combined corpus of Rs 1,240 crore and an $80-million offshore fund. Under its JV with IL&FS, Milestone runs two funds with a size of Rs 525 crore each.
According to sources, Piramal, 55, is all set to widen the group’s presence in the real estate space as his son Anand Piramal is ready to take control of the real estate business. Piramal junior, who is a Harvard Business School graduate, is expected to join the company next month.
In May, as part of beefing up presence in the PE space, Piramal Healthcare acquired 100 per cent stake in Indiareit Fund Advisors and Indiareit Investment Management Company, an offshore real estate fund, for Rs 225 crore. The two funds manage around Rs 3,800 crore. Piramal, which holds 52 per cent stake in Indiareit, acquired 15 per cent stake from CEO Ramesh Jogani and the rest from other investors.
“Through the acquisition of Milestone’s funds, “ said an industry expert, “Piramal can avoid today’s tough fundraising scenario as far as new fund launches are concerned. “
Since 2007, Piramal has been running India Venture Advisors, a Rs 400-crore fund, for investments in areas of healthcare and life sciences. The firm, headed by former State Bank of India Chairman A K Purwar, invested in Trichy-based specialty hospital firm Kavery Medical Centre and Hospitals and Gurgaon-based C&C Constructions, through its first fund-India Venture Fund 1. India Venture Advisors plans to launch its second fund once 80 per cent of the first fund is deployed.
