The country’s largest home-grown private equity firm IL&FS Investment Managers Ltd (IIML) has reported a modest revenue growth, in spite of being partly boosted by the acquisition of Saffron Advisors (completed in Q3), while the rising operational costs shrank its net profit for the fourth quarter ended March, 2011, over the year-ago period.
The listed PE firm, with assets of $3.2 billion under management, has reported just 7 per cent increase in consolidated revenues to Rs 53.25 crore for the fourth quarter, compared to Q4 FY’10, while its net profit declined 22 per cent to Rs 18.24 crore. On a sequential basis, the company’s consolidated revenue declined 8 per cent while the net profit rose 11.2 per cent over Q3 FY’11.
IIML scrip dropped 3 per cent at mid-day trade on Bombay Stock Exchange, after its results announcement in a strong Mumbai market. At this price, the company is valued at Rs 767 crore or about 5.4 per cent of the AUM.
At the end of Q3, the company had said that its revenue had been boosted by increase in AUM, even as amortisation related to the acquisition last year did affect its profits. A decline in sequential revenues can be a worrying sign for the firm, as also the rising cost of operations. Archana Hingorani, CEO of IL&FS Investment Managers, had earlier said that the company’s focus during Q4 would be to continue to augment the funds, closely monitor its portfolio, ensure value protection of the portfolio and also strengthen the risk and control frameworks.
Last August, IIML had acquired the Mumbai-based private equity real estate firm Saffron Assets Advisors Pvt Ltd, which brought an additional $400 million asset under IIML, making it the largest PE fund management firm in India, with assets like infrastructure and growth capital, besides real estate.
Some of the representative transactions of IIML include Shoppers Stop, Gujarat Pipavav Port, IBN18 Broadcast, Godrej Beverage & Foods, Spicejet, ABG Shipyard, Tejas Networks, Bharat Serums & Vaccines, Indiagames, DQ Entertainment, Ramky Infrastructure, Den Networks, DB Realty, Electrosteel Integrated, Orbit Highcity and QVC Realty.