Tata Capital, a subsidiary of Tata Sons, is planning to raise $1 billion for its private equity business by December 2011, said Praveen P Kadle, managing director and chief executive officer said on Wednesday.
The company has already closed the first tranche worth $200 million on the domestic side. “We have started the international fundraising process this month. In due course, we will talk more about this. Going by the initial feedback, we have got a good response from international investors,” Kadle said.
The company has tied-up with Mizuho Bank of Japan for its growth fund. Tata Capital also has a healthcare fund for which they have tied up with Swiss firm HBM Partners.
Besides these, the company also has a special situation fund, which helps to meet capital requirements of some stressed companies and an innovation fund to finance new technology ideas which can become big success, Kadle said.
Tata Capital is also looking to create a debt fund in collaboration with an international bank.
According to Kadle, Tata Capital is eyeing asset book of Rs 15,000-16,000 crore this fiscal. The company has already amassed Rs 13,000 crore.
The company plans to raise the balance Rs 2,000-3,000 crore primarily by way of debt. “The funds raised will be non-equity because the company does not have plans to go public immediately. We would like to create value in the company and in due course we will think of going public,” Kadle said.
Tata Capital has a branch network of 105.
Through this, the company is planning to foray into the securities broking business in the next 12-18 months, Kadle said.
Tata Capital’s wealth management business has also developed significantly, and is already managing Rs 8,000 crore funds of corporate clients.
“Of this, 75% of funds are managed for Tata group companiesand the remaining for other corporates,” Kadle said.
The company posted a gross revenue of Rs 1,379 crore in 2009-10. Profit after tax stood at Rs 51 crore. It has a net worth of Rs 2,120 crore.
Tata Capital’s total loan book size as on March 31, 2010 stood at Rs 10,000 crore, and up till June-end, its loan book size was around Rs 13,000 crore. The company’s capital adequacy ratio stood at 21.4% as on March 31, of which Tier-I capital comprises 16%.
Source: DNA India