Private Equity (PE) fund Milestone’s plan to tap into the rapidly growing capital market in India took fruit this month when the company filed for a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). Milestone would be the first PE since IL&FS Investment Managers to raise capital through the IPO route.

The PE fund provides investment advisory services for investment in various sectors including real estate, logistics, health care, education and infrastructure ancillary activities. 

The company hopes to raise around Rs.40 crore ($ 8.4 million) by diluting 30 percent in the company. The money raised through this IPO will be utilized for setting up the infrastructure fund and a small and medium enterprise fund.

Milestone was advised by the Mumbai office of Amarchand & Mangaldas where the team was supposed to have been led by Capital Markets Partner Yash Asher.

The DRHP mentions that the top five PE firms headquartered in India (Domestic Asset Managers) have nearly $ 10 billion (Rs. 45,000 crore) in assets under management with total assets under management by domestic funds being around $ 25.8 billion (Rs. 1,16,000 crore). For those who are interested in the structure of a PE fund, Private Equity funds take in general the form of Limited Partnerships. The investment manager of a Limited Partnership is called the General Partner (GP) and each investor a Limited Partner (LP). The GP‟s responsibilities include due diligence, structuring of financial contracts, monitoring investments, to provide resources for portfolio firms and to build exit strategies for investors.

In terms of legal expenses, Milestone’s legal and professional fees increased from Rs. 3.89 million ($86,400) to Rs. 18.73 million ($416,000) during the last fiscal year.

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