Private Equity

Private equity is an alternative investment class through which investments are made in private unlisted companies. The money to carry out these investments is pooled from HNIs and institutional investors.

Typically, the investment horizon for private equity funds in India is between 5-10 years, with the option to extend it on an annual basis.

Private equity funds come with a higher minimum investment, and hence investment in private equity is restricted to HNIs and institutional investors. Investment professionals raise the capital and manage the funds. The funds are used to invest in unlisted companies and help them meet their operational costs, scale up their business, acquire new technologies or undertake future acquisitions.

Asset management firms and wealth management firms have launched private equity services to cater to their HNI and ultra HNI clients. The investment objective and the investment universe of these private equity funds can vary.

IndiaNivesh offers private equity services to its clients through two funds, IndiaNivesh Growth & Special Situations Fund and IndiaNivesh Renaissance Fund.

IndiaNivesh Growth & Special Situations Fund is a Rs. 150 crore private equity fund aimed at creating high growth direct investment opportunities. The focus of the fund is small and micro businesses with a horizon of 4-6 years. This fund is now closed for subscriptions.

Through this fund, we seek to acquire significant minority stakes in companies, to create value for the business and investors. These companies have a positive cash flow from the early stages. The investment size of this fund ranges from Rs. 10 crores to Rs. 25 crores.

Highlights

• Our management team has significant operational experience and works with investee companies at each step.
• We are currently invested in asset-light B2C businesses, companies that offer disruptive technologies and services, retail consumption, agri-businesses as well as logistics.

IndiaNivesh Renaissance Fund is a proposed Rs. 900 crore Alternative Investment Fund (AIF) (CAT II) focusing on “Turnaround Situations” in mid-sized manufacturing or consumer-driven businesses. It will invest in viable businesses experiencing temporary or transitional operating problems, or businesses with strong operations but burdened with insufficient liquidity or excessive debt. The investment horizon for the fund is approximately 4-6 years with an average investment size of Rs. 60 crores.

Investment factors

• Revenue: sizable and scalable, able to grow at least 2x without major capex
• Sector in a long-term growth trajectory
• Strong turnaround potential post fund infusion
• Fund utilisation mainly towards working capital support and de-bottlenecking capacities
• Governance: promoter willingness, integrity and management bandwidth
• USP: brand & distribution network, IPR, entry barrier, niche product & technology

The fund will actively engage with its portfolio companies by strategising, mentoring and monitoring to execute a turnaround.