India's Network 18 Group is launching a fund to invest in both Indian films and films targeted at Indian audiences, which aims to raise $110m via a flotation on the AIM market of the London Stock Exchange.

The Mumbai-based media giant is behind the Indian Film Company (IFC), a newly-incorporated, Guernsey-registered company, which plans to invest in Hindi-language films - a $2bn market which is growing at a compound annual growth rate of 16%. Network 18, the parent of recently-launched film producer-distributor Studio 18, is backing the fund through a $10m subscription.

The fund's advisory team and directors include Studio 18 CEO Sandeep Bhargava and CFO Shibashish Sarkar, leading Indian filmmaker Shyam Benegal, who has taken the post of non-executive chairman, and Network 18 founder and majority shareholder Raghav Bahl, who has joined the board as non-executive director.

Grant Thornton Corporate Finance has been nominated as adviser to IFC, with Oriel Securities and Elara Capital as joint brokers.

The creation of IFC is the latest in a series of corporate moves by the Indian film industry which has started to tap capital markets for expansion.

Bahl said the IFC will 'enable high quality international investors to reap the benefits of the structural changes and growth opportunities being thrown up by the Indian film industry.'

IFC will have first right of refusal on all film projects originated by Studio 18 but also retains the flexibility to invest in films generated by other production companies.

Launched in June 2006, Studio 18 is involved in film production and distribution, both in India and overseas, and is planning to launch its debut slate at the upcoming Cannes market.

Network 18 is the parent company of Mumbai stock exchange-listed Television 18 and Global Broadcast News, which have joint ventures with CNBC and Time Warner.