Infrastructure Leasing & Financial Services Ltd (IL&FS) will launch a Rs 5 crore venture capital fund targeting the automobile industry. This fund will invest in existing companies and new joint ventures, including listed companies. It also plans a new venture capital fund for the software industry soon.
The fund is under syndication and major financial institutions in India are expected to participate. In addition to IL&FS, IFC Washington and banks like the Bank of India are expected to participate.
Though the syndication is expected to close in two months, IL&FS has started looking at deals in the automobile sector.
The new fund will target companies from the recession hit automobile industry. Sources say as the automobile industry is reeling under declining demand and general economic depression, there were bound to be mergers consolidation and joint ventures. IL&FS wants to be part of this action.
India has been identified as competent in the fields of light engineering, and multinationals and Indian investors are keen to explore investment opportunities in the auto sector.
IL&FS already has a Rs 13.5 crore ancillary fund reserved for the sector. But as most of the major automobile players are listed they could not avail this fund.
IL&FS works mostly in the various areas of infrastructure and looks at long term funding of infrastructure projects.
In 1996-97, the company posted a profit of Rs 43.7 crore while its gross profit was Rs 88.56 crore.
The total income of the company was Rs 293.51 crore and the operating income was Rs 45.47 crore.
IL&FS also concentrates on investment banking activities. The World Bank has granted the company a $200 million loan for infrastructure projects. The projects include: the Rau-Pithampur toll road project, Delhi-Noida bridge project, panvel by-pass project, Tirupur area development and Gujarat project.
