Milestone Religare Investment Advisors Pvt. Ltd., the private equity joint venture between Milestone Capital and Religare Enterprises, is set to raise its offshore fund in a couple of months. The PE firm, which plans to raise $200 million, has started talks with the limited partners. The fund, named India Build-out Fund II, will invest in new areas of infra ancillary and consumption services apart from the current investment areas of education and healthcare.

Milestone Religare has already raised $118 million for its India Build-out Fund I, which is a domestic fund. Milestone Capital alone manages six funds totalling Rs 2,600 crore through its standalone PE firm.

India Build-out Fund I, which was launched last year, has made four investments in healthcare and educational institutions such as IMS Learning Resources ($5 million), Krishna Institute of Medical Sciences (KIMS) ($13 million), Healthcare Global Enterprises ($6.75 million) and Resonance Eduventures ($13.5 million).

Talking to VCCircle, Rajesh Singhal, managing partner, Milestone Religare Investment Advisors, said, “With the new proposed fund, we aim at investing in mid-sized companies with a deal size of

$20-30 million. The new fund will also increase our global exposure as far as the fundraising is concerned. Also, we will explore newer areas like FMCG, media and retail with the offshore fund.”

A few of the portfolio companies in the first fund are currently in expansion mode. KIMS, which has a bed capacity of 300, plans to add 500 more beds through multiple hospital buyouts.

Milestone Capital has also launched two other new funds this year in partnership in areas like shipping and special situations. The Rs 400-crore Special Opportunities Fund - I will be managed by Capstone Capital, a JV between Milestone and Money Matters Financial Services. The five-year tenured fund was launched in February. Another fund is $100-million Blue Ocean Maritime Fund, which will acquire and operate maritime vessels, and is in talks to enter into a JV with Mercator.

Recently, Milestone Capital has filed a draft red herring prospectus (DRHP) for an initial public offering which would constitute a 30% stake dilution. The PE firm plans to use the proceeds from the issue to seed an infrastructure fund and a small & medium enterprises (SME) focused fund.

With a recovery in the global markets, more and more Indian PE firms are in the process of fund-raising. Last week, VCCircle had reported that Blue River Capital was in the process of raising its second fund-Blue River Capital II, a $200-million offshore fund following its

partnership termination with Edelweiss Capital. ICICI Venture, the private equity arm of lender ICICI Bank, plans to launch a $500- million fund and a Rs 1,000-crore real estate fund this year.

Similarly, Indiareit Fund Advisors, promoted by the Piramal Group, is in the process of raising Rs 750-crore Indiareit Domestic Fund Scheme IV including green shoe option of Rs 250 crore. IL&FS Investment Managers Ltd (IIML) also plans to raise its latest sector-agnostic fund, Tara India Fund IV at $400 million. Motilal Oswal Private Equity Advisors Private Limited, the PE arm of Motilal Oswal Financial Services Limited, also plans to raise its third fund- India Business

Excellence Fund (IBEF) 2- of Rs 1,500 crore.

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