A new fund has been launched, designed for Gulf investors wishing to invest in India. The arrangers of the Oryx (India) Fund, which will be listed on the London stock exchange, plan to raise up to $100 million by the 12 March. The closed-end fund will invest in small and medium- size businesses, which the arrangers say offer shareholders the best chance for capital growth.
The UK brokerage house Cazenove & Company is sponsoring the London listing. The fund is being marketed in the UK by Consulta, and in the Gulf by the Muscat-based Al Ahlia Portfolio Securities. Al Ahlia was involved with the Oryx Fund, which gave foreigners the chance to invest in Omani shares.
Most of the money in the India fund will be placed in listed securities in small and medium-size businesses. However, up to 35 per cent of the funds will be directed at unlisted companies. The shares being targeted will have a price earnings multiple lower than most major stocks and are expected to show a 25 per cent a year increase in earnings per share.
The investment advisors are the London-based Chescor, which have already identified 400 companies expected to show strong growth. Chescor has offices in Bombay and Delhi, but will manage the fund from its Mauritius-based subsidiary, Chescor International.
The arrangers say the marketing strategy will be more like a private placement than a public offering, as it is aimed to attract sophisticated Gulf investors prepared to make a large investment. The fund will only go ahead if more than $30 million is raised, although the promoters expect the closing figure to much higher. The upper limit has been set at $100 million.
The fund is planned to be listed on the Bahrain and Oman stock exchanges. The chairman of the fund is Salim Hassan Macki, the head of the economic and technical department in Oman’s Foreign Affairs Ministry.
Several other funds are planned by Gulf-based institutions to give GCC investors access to the Indian market. Most recently, the Bahrain-based TAIB Bank announced plans to launch a $50 million India fund. Marketing for the fund will begin after Ramadan (MEED 10:2:95).