Indiabulls Securities to foray into PE segment

Indiabulls Securities Limited (ISL), the stock broking arm of Indiabulls Financial Services Limited (IBFSL), plans to raise $250-500 million for its private equity fund that will invest in companies in all sectors barring real estate.

The fund will be launched in the next financial year.

If it is a $250 million fund, then ISL will make an anchor investment of $50 million. If it is a $500 million fund, then it will contribute $100 million.

The broking outfit has already received commitment for $125 million from its existing investors.

"We are in the process of putting it together along with having the right skills in place. We will leverage our existing international relationships for funds," said a senior company official. In December 2007, IBFSL demerged its stock broking arm ISL in order to unlock value for shareholders.

With the demerger, ISL will list independently and house the stock broking business, while IBFSL will represent the group's financing business.

In 2006, the company demerged its real estate business from IBFSL into Indiabulls Real Estate, a separately trading public entity. "Since we execute our own projects, we will not invest the funds in the real estate sector," added the company official.

With the launch of this fund, ISL will join a clutch of top brokerage and financial services firms led by Motilal Oswal Financial, Anand Rathi Securities, Edelweiss Capital, JM Financial, Religare and IDBI Capital Markets that already have private equity funds.