Hsbc Setting Up Second Pvt Equity Fund

HSBC is setting up a second private equity fund in India with a corpus of $100 million. The fund is expected to be in place by the end of this year.

The first such fund managed by its subsidiary, HSBC Private Equity Management Mauritius, with a corpus of $60 million, has already invested around $30 million in the region.

Jonathan Bond, chief representative of HSBC Private Equity Fund Management Mauritius, said, "Stock markets in India are looking extremely positive and are growing fast. The bank has therefore put in a consideration of another such fund although no final decision has been taken."

 

Bond also said that the first fund was expected to be fully invested before the end of the current calendar year which would provide an impetus for a second fund.

The first fund was set up in 1996 with the objective of investing in unlisted companies. The company which is a joint venture with HSBC's Mauritius headquartered in Delhi.

At present the fund has six companies on its portfolio which include 5 Indian companies and one Sri Lankan company.

Of its initial portfolio, however, Shree Rama Multitech Ltd has already come out with an initial public offering of Rs 150 crore.

This issue was lead managed by DSP Merrill Lynch whereas the HSBC fund had invested $9 million or 16 per cent of the equity in Shree Rama Multitech Ltd.

The fund has a $3.5 million investment in Sri Lankan company Millennium Information Tech Ltd, which amounts to a 15 per cent stake.

Millennium Information Tech is Sri Lanka's leading financial and telecom products software company.

Other Indian companies where the fund has an equity stake include Kurlon Ltd in which the fund has a stake of 27 per cent on an investment of $3.8 million; Synergies-DooRay Automotive Ltd in which an investment of $6.2 million is equivalent to a shareholding of 40 per cent; Carborundum Universal Ltd where the fund has invested $4 million and has a stake of 4.5 per cent; MAC-CWT Distriparks Ltd in which an investment of $2.2 million is a 40 per cent stake.