Scripscan:IL&FS Investment Managers Ltd
cmp:26
Code:511208
Story:IL&FS Investment Managers Limited is the private equity and venture capital arm of Infrastructure Leasing & Financial Services Limited. The firm specializes in seed capital, growth capital, expansions, restructuring, and buyouts investments. It primarily invests in India and is now seeking opportunities in Asian market. The firm seeks to invest in healthcare, power, waste management, toll roads and cable infrastructure, biotechnology, niche manufacturing, retail, media, consumer services, consumer brands, infrastructure and related services, telecom, city gas distribution, shipyards, life sciences, real estate, information technology, and information technology enabled services companies. It seeks to invest in China and India. It seeks to invest between $ 15 million and $30 million in companies with market capitalization of $50 million and $150 million. The firm prefers to make seed capital funding in the range of $2 million and $10 million. It seeks to hold investments for a period between three to five years. The firm seeks to make private equity investments in post revenue companies. It prefers to take a seat on the board of directors of its portfolio companies.IIML has reported decent set of numbers for the quarter ended September’11 which was inline with expectations.Strong investment track record, high management credibility coupled with its sound business model would enable the Company to grow in future. Value unlocking by the way of carry profit from FY13 onwards is likely to be the major growth catalyst for the Company going ahead. However considering the increase in global uncertainty & delay in fund raising,I have lowered down my net fund raising estimate by ~$500 mn to $3.2 bn in FY13E.I have valued the Company based on SOTP of its assured annuity income (MCap/AUM) and NPV of its carry profits. At the CMP of Rs.26, the stock is trading at 0.038x MCap/AUM (FY13E).The stock has corrected sharply in last couple of months resulting into high dividend yield of ~5.5%.Buy it with an one year price target of 40rs.
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