Gaja Capital marks first close of new fund at $130M, targets mid-2015 for final close

Mid-market focused private equity firm Gaja Capital has hit first close of its new fund at $130 million (Rs 797 crore) and is now looking to raise the entire targeted corpus of $225 million (with hard cap of $250 million) by the first half of 2015, a top executive of the firm told VCCircle. 

Last year, IFC had committed $25 million for the new fund christened Gaja CapitalFund II Ltd (Gaja II), a closed-end generalist private equity fund focusing on providing growth capital to mostly unlisted mid-market companies and SMEs in India. Gaja II seeks to invest in 6-10 companies through equity and equity-linked securities.

In the previous disclosure IFC had said Gaja seeks to make a first close of the new fund by the end of 2013 or early 2014 at $75 million or more. The PE firm eventually made the first close at a much higher level. IFC had approved the investment in December and signed the transaction in May this year, its project updates reveal. 

“Our target corpus remains $225 million and hard cap is still $250 million. We are confident of hitting the hard cap,” said Gopal Jain, founder and managing partner of Gaja Capital Partners.

The news of the firm achieving first close was first reported by The Economic Times. 

The latest fund will continue to focus on education, financial services and non-durable consumer sectors and is in the midst of finalising a deal. The firm has also decided to slightly increase its ticket size to $15-25 million from $15-20 million previously. 

“Our intention is to stick to our lower middle market/strategy. Growth in deal size is marginally reflecting inflation and growth in size of the economy,” Jain said. 

The new fund follows its predecessor which had a corpus of $180 million and was raised in 2007-08. This fund invested in portfolio firms like pre-school chain EuroKids, automotive services company Carnation Auto, private sector lender RBL Bank, education and training services company CL Educate and staffing company TeamLease. 

Education services company CL Educate, best known for its test preparation brand Career Launcher, filed its documents with SEBI last month for an initial public offering (IPO) which would provide a part exit to Gaja Capital. 

Another Gaja portfolio firm, RBL Bank is close to filing its documents for going public.

(Edited by Joby Puthuparampil Johnson)

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