The deal values IAL, which is closely held by the Vijeshwar family, at Rs 3,000 crore. However, the exact equity stake picked up by DE Shaw is not known as the company has issued a convertible instrument.
3i, ICICI Ventures and Merrill Lynch also looked at the deal, sources familar with the developments said. Enam Securities was the sole advisor to the transaction.
When contacted, Robin Vijeshwar, managing director, IAL, said the company is in talks with several private equity funds, but declined to discuss the details of the transaction.
The company plans to use the funds for its 350-acre Jaipur amusement park, and some other ongoing projects.
"We are looking at bigger formats of entertainment parks ranging from 50 to 500 acres and are in talks with several state governments as we plan to have a pan-Indian presence. The funds raised will be used for acquiring land, procurement of rides and construction of parks," Vijeshwar added.
According to industry players, amusement parks are catching the fancy of PEs as they expect an IRR ( Internal rate of return) of 20 to 25 per cent over a three-year investment.
These entertainment initiatives, which are effectively considered social infrastructure, are a great revenue earner for the state governments in the form of entertainment tax, apart from creating indirect employment and big opportunities for SMEs (small and medium enterprises).
Subash Chandra-promoted Essel group, the promoters of Essel World and Fantasy Land, is another major player in the amusement parks business in the country.
DE Shaw, one of the world's largest alternative assets provider with over $36 billion in aggregate investment capital, has made considerable investments in the country, such as in a unit of realty developer DLF and in a renewable energy project.