Ananta Capital, a new entrant to Indian private equity space, has identified the target for its potential debut deal even before it has achieved the first close of its fund with a proposed corpus of $100 million. The target firm is among India's leading specialty chemicals firms based in South India and the PE firm would be looking at investing an aggregate amount of $15-20 million. Ananta will acquire majority stake in the firm.
Ananta, which is on the road to raise the India Pledge Fund, enjoys the flexibility to conclude the deals once the commitments are given. The pledge fund also has an advantage of discussing the investment pipeline in advance with the LPs, said sources familiar with the development.
Gurgaon-based Ananta Capital was set up last year and is expected to do a first close of its fund at $50 million by November-December with a final close by mid-2011.
India Pledge Fund has its focus on two key sectors - Advanced and Specialty Materials, with smaller areas such as composites including fibre reinforced plastic (FRP), engineering plastics and polymers, specialty resins and chemicals, performance materials such as solar films.
Acknowledging the development, Jaganath Swamy, partner, Ananta Capital, told VCCircle, "We are in advanced stages of talks with the company, which is having a strong presence in Indian specialty chemicals space. We hope to close the deal in a month." He declined to disclose further details.
The end-user industries for the specialty chemicals and composites such as auto components, railways and metros, industrial tanks and pipelines, construction etc has tremendous growth in the current Indian scenario. Advanced/Specialty Materials currently comprises a $6-8-billion market in India growing at rates of over 15-20%.
According to VCCedge data, since 1993, about 11 deals worth $178 million took place in specialty chemicals sector in India till date. The major deal among those includes Bain Capital's $89-million investment in Himadri Chemicals in 2009 and 2010.