Il & Fs Arm Reaches Out To Sunrise Segments

Spurred by the success of handling the initial public offerings (IPOs) of Balaji Telefilms and Mid-Day, IL&FS Merchant Banking Services Ltd is now branching out more strongly into other sunrise industries -- retailing and healthcare.

The merchant banking arm is in talks with the renowned dietician, Anjali Mukerjee, and professional gym Talwalkars, to discuss funding possibilities through private equity placement for their respective expansion sprees.

With a greater number of corporates getting into tertiary healthcare with the set up of corporate hospitals, IL&FS' merchant banking arm is looking at a number of mandates in this area.

IL&FS Merchant Banking recently completed a loan syndication for Fortis Healthcare amounting to Rs 75 crore. It is surveying further opportunities in the area of corporate hospitals and tertiary healthcare.

"It is more of debt play investment in corporate hospitals and healthcare companies where we have a few mandates in hand," Satish Shenoy, president and CEO, said. Corporates are looking to raise around Rs 200 crore each for setting up these tertiary health operations.

Many large corporates, such as Max Group, Reliance, Wockhardt, and Ranbaxy, have looked at healthcare as a major business, especially those venturing into insurance.

IL&FS Merchant Banking is concentrating on certain segments, where the thrust would be on project financing due to the group's domain expertise, Shenoy said.

Even with the retail thrust emerging and chains branching out into new cities, Shenoy told Business Standard that till the return on equity exceeds 20 per cent - from the present 12 to 14 per cent - equity investors will continue to stay away.

IL&FS Merchant Banking recently helped Mars Restaurants, the chain owning Jazz By the Bay, Just Round The Corner and Dossa Diners, raise Rs 20 crore through private placement, Shenoy said. "In the first phase, owners have to bring in their own funds before they can expect to raise debt or tap the equity route," Shenoy said.