Summary of Proposed Investment
Project Number
8143
Company Name
India Automobiles
Date SPI Disclosed
May 14, 1997
Country
India
Industry
other
Status
Completed
Sector
Private Equity/Venture Cap Fund - Sector
Department
Equity Portfolio Management
Environmental Category
FI
Previous Events
Approved : Dec 18, 1997
Signed : Oct 27, 1998
Invested : Jun 21, 1999
Project Description
Summary Of Project Information (SPI)
| Project Name | India-The India Auto Ancillary Fund |
| Region | Asia |
| Sector |
Projected Board DateJune 14, 1997
Company NameIL&FS Venture Corporation Limited (IVC)
Technical Partner and/or Major Shareholders
Local sponsor: Infrastructure Leasing and Financial Services Limited (7%)
Mahindra and Mahindra (7%)
Bank of India (7%)
IFC (15%)
Indian institutional investors (7%)
Offshore institutional investors (15%)
Project Cost Including proposed IFC investment
Initial corpus of the Fund of at least $42 million. IFC is expected to take up to 15% of the equity or an amount equivalent to US$6.5 million.
Location of project and Description of site
IVC, the Fund Management Company, is located in Bangalore, India. IVC will make direct investments in auto ancillary and component companies throughout India.
Description of Company and Purpose of Project
The project involves the establishment of an auto ancillary fund of corpus of at least US$42 million that will focus on investment opportunities in India’s rapidly growing auto ancillary sector. The Fund is being promoted by IL&FS (Infrastructure Leasing and Financial Services) Venture Corporation (IVC), a fund management company currently managed by IL&FS, an Indian non-bank financial institution engaged in commercial development of infrastructural services and provision of financial services, including investment banking, asset management, venture capital management, financial advisory and project development, and infrastructure project promotion and finance.
The liberalization of restrictions on capacity, licensing requirements and foreign ownership has spurred growth in India’s automotive industry, and with it the ancillary sector with sales of US$2.6 billion in 1995/96 and with growth averaging over 26% p.a. in the last three years. There has been a spate of joint ventures in the last three years between Indian companies and the automobile majors intent on establishing a presence in the Indian vehicle market. Indications are that the new and existing auto players in India plan to operate from a platform of global competitiveness and will require from the ancillary companies they source from components that are internationally competitive in quality, price and delivery. The proposed Fund seeks to exploit investment opportunities in the new environment through direct equity and quasi-equity investments in ancillary companies undertaking expansions, upgradation as well as in greenfield projects.
Environmental Category and Issues
This is a Financial Intermediary (FI) category project. The Fund will be required to undertake an environmental review of eligible investee companies’ operations. IVC will assign two officers to undertake environmental reviews of investee companies. In addition, IVC will provide IFC with an annual environmental monitoring report.
| Date SPI sent to PIC | May 14, 1997 |
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Sponsor / Cost / Location
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