Aditya Birla Private Equity – Fund I has announced that it has received commitments in excess of Rs 500 crore. In a filing to the stock exchanges, the company said, “it will shortly announce the first close for subscription to this fund in India.” Bharat Banka , MD& CEO, Aditya Birla PE could not be reached for further details.
Till now, the fund had an anchor investment (initial commitment from the fund sponsor) from parent Aditya Birla Group. The private equity fund is looking to raise a total of $250 million in a mid-market focussed fund, as announced earlier.
Much of this money is domestic commitments, Bharat Banka, MD, Aditya Birla PE told VCCircle in a recent interview. “The interest received from the domestic LPs for the fund has been terrific,” said Banka, who has built a private equity team drawing talent from funds such as ChrysCapital, IL&FS Private Equity, Europa partners and Kurt Salmon Associates. He had also said that the first close expected in this quarter would essentially be domestic money.
This appears as a big validation of the rise of the domestic investor community in the private equity world. A few weeks back, ICICI Venture Funds Management Co, the private equity arm of ICICI Bank, said, it made a first close of $250 million for its latest fund through commitments from domestic investors.
Domestic LPs comprise of financial institutions like banks, insurance companies, pension funds and HNIs (high networth individuals). The biggest domestic LPs in India are General Insurance Corporation, Life Insurance Corporation and State Bank of India and UTI. These institutions are allowed to invest a small percentage of their assets under management in these instruments.
Aditya Birla PE’s Fund I is targeting 10-15 investments, averaging $20 million in each, and will look at taking significant minority stakes in portfolio companies. Although it is sector-agnostic, it may be partial to consumer-facing companies, EPC segment, education, healthcare, logistics, media and entertainment.
Aditya Birla PE has been warehousing the group’s anchor investment till now. The private equity arm has been investing out of the capital committed by the parent. It has picked a minority stake in Bombay Stock Exchange, one of the oldest in the world, through its newly formed private equity arm. The deal was done during the demutualisation process of BSE. Besides this, the fund also picked up 26% in apparel retail chain V Mart last year. Another investment is a 5% stake in IT solutions provider Core Projects & Technologies for Rs 13.5 crore.
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