The country’s largest homegrown private equity firm IL&FS Investment Managers Ltd (IIML) completed four partial exits including a few from its real estate portfolio during the quarter ended September 30, even as corporate valuations were hit by poor market sentiments globally.

IIML reported 4.6 per cent rise in consolidated net profit for the second quarter to Rs 18.1 crore over the same period last year. Sequential net profit also rose by a similar percentage.

The listed PE firm, with assets of $3.2 billion under management, has reported 5.2 per cent increase in sequential consolidated revenues to Rs 54.4 crore for the quarter, compared to Q1 FY12, while it grew around 25 per cent over Q2 FY11.

Bottom-line growth was relatively muted due to higher costs, with employee costs rising 30 per cent and advisory fees jumping over fourfold over the year-ago period.

The year-on-year revenue performance was partly boosted by the acquisition of Saffron Advisors (completed in Q3 last financial year). In August 2010, 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. It has assets like infrastructure and growth capital, besides real estate.

In a release, IIML has said that the firm is in the process of closing deals across all verticals of businesses that offer derisked and potentially attractive returns in the future.

“The fundraising environment is challenging as investors continue to be cautious. Continued negative news flow from macro-economic front, in India and other parts of the world, is a matter of concern as well as an opportunity for IIML,” said Archana Hingorani, Chief Executive Officer of IL&FS Investment Managers.

“The company is looking at significant deal flow with strong underlying potential that would yield strong returns in the future. In spite of the difficult exit environment, IIML has continued to achieve exits in the real estate vertical. As and when, markets achieve stability and clarity on domestic and global fronts, the company should be in a strong position to generate more exits,” she added.

The company has not disclosed, though, which firms it part-exited last quarter. Incidentally, its realty portfolio includes names such DB Realty, Orbit Highcity and QVC Realty.

Some of the other 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 and ElectroSteel Integrated.

During the first quarter, IIML had invested Rs 137.5 crore across three private equity deals. In the three months ended June 30, it had also made three partial exits in the real estate space while closing one complete exit in the PE space.

IIML scrip was up 0.3 per cent at mid-day trade on the Bombay Stock Exchange, after its results were announced. At the latest quoted price, the company is valued at Rs 670 crore or about 4.7 per cent of the AUM (based on last disclosed numbers). 

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