February 2011
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Milestone Capital withdraws IPO application

Milestone Capital, operating in the private equity business, has withdrawn its initial public offer draft prospectus filed with market regulator Sebi.

Sebi is said to have sought numerous clarifications from the company on high level of risks associated with IPO funds being utilised for private equity (PE) and venture capital (VC)investments.

Though, the company filed the draft prospectus with Sebi for the proposed IPO on June 25, 2010, it has been unable to get the go-ahead following queries from SEBI.

The regulator had sought to know the rationale behind funds to be raised from retail investors for PE and VC investments, which has largely been the domain of institutional investors in India.

Though Milestone Capital advisors replied to the clarifications through the lead issue manager IDFC Capital Ltd, the regulator was apparently not satisfied with the details furnished by the company, a person in the know of the matter said.

The IPO could not get the Sebi go-ahead for almost eight months from the time of filing of draft prospectus, making it one of the most delayed public offer.

Subsequently, Milestone Capital withdrew its draft prospectus on February 17, but it could not be ascertained immediately whether the company plans to approach Sebi again with a revised IPO proposal.

The firm describes itself as “a professionally managed company providing investment management services on various funds and schemes to Indian and global investors across various asset classes”.

It target investor base include High Networth investors (HNI) among non-institutional investors and insurers, banks, pension funds & corporate houses among institutional investors.

The company's merchant bankers for the proposed IPO included IDFC Capital, Edelweiss Capital and ICICI Securities.

It had sought to sell 30 per cent stake through the IPO, but had not disclosed the amount sought to be raised.

Another PE firm Future Ventures India, part of Kishore Biyani-led group, is also planning an IPO.

But, it would not invest IPO proceeds in any PE fund and would utilise them for investment in businesses relating to consumption-led sectors.

Future Ventures had first filed the draft prospectus in August 2010, but later had to withdraw it due to “incomplete documentation”.

Through its lead IPO manager Enam Securities, Future Ventures filed a revised draft prospectus in September 2010 and was given a go-ahead by Sebi last month.

There are only a few PE firms, such as IL&FS Investment Managers (IIML), that are listed in India, while globally such listed entities include Blackstone Group and Kohlberg Kravis Roberts.

Source: Economic Times

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