World Bank's private investment arm International Finance Corporation (IFC) has proposed to put in $40.6 million (Rs 270 crore) in Indian private equity firm Multiples Alternate Asset Management Pvt Ltd's second fund.
Led by former ICICI Venture CEO Renuka Ramnath, Multiples is looking to raise a total of $550-600 million in its second outing, as per an IFC disclosure.
If it is successful, Multiples will cross the $1 billion assets under management (AUM) mark, coupled with the assets under its first fund.
The fresh funds will be used to invest in equity and equity-linked instruments of mid-market companies in India across sectors such as consumer, financial services, healthcare, IT services, logistics and agriculture.
Besides IFC's proposed $40.6 million investment, its fund management business – IFC AMC – will also make a parallel investment, the statement added. It did not say how much will IFC AMC put in the PE fund.
IFC that has an active direct private equity style investment practice in India, also lends to firms in the country. It also has an active LP or limited partner portfolio in India where it backs PE and VC funds focused on India. Its investment in Multiples' fund would expand its LP exposure to the country.
Last April, VCCircle had reported that Multiples has received commitment for $400 million from international investors for its second fund and has also raised the target size of the new fund by a fifth to $600 million.
As first reported by VCCircle, Multiples was earlier targeting to raise $500 million in its second outing and had already got commitment of $300 million by December 2014.
The PE firm was also looking to tap the domestic investor base, in a departure from the conventional fundraising model for sector-agnostic private equity funds in India. Realty funds regularly raise domestic capital to invest in property developers in the country but larger PE firms primarily bank on overseas institutional investors.
Multiples was founded in 2009 by private equity veteran Ramnath, who stepped down as managing director and chief executive of ICICI Venture, the PE arm of ICICI Bank Ltd, to start her own firm.
Multiples had raised its maiden $405 million fund in 2011 wherein Canada Pension Plan Investment Board (CPPIB), Dutch pension fund PGGM, UK’s CDC Group and pension and sovereign funds from Europe and West Asia were the anchor investors. Fund I made investments in 11 companies and has been fully invested.
Multiples' current portfolio includes multiplex firm PVR, e-tailing focused logistics company Delhivery, textiles major Arvind and Indian Energy Exchange. It has exited from South Indian Bank and Murugappa group's financial services firm Cholamandalam.
Many other India-focused PE firms are on the road to raise new funds. CX Partners is looking to raise $400 million; Asian Healthcare Fund is eyeing up to $150 million in a sector-focused fund and Sabre Capital is raising around $45 million in a new healthcare-focused fund.
Multiples' fund would be the third largest India-focused PE fund to be raised in the last year. Last September, Everstone raised $730 million in its new sector agnostic fund and in July, India Value Fund Advisors (IVFA) raised $700 million in its fifth India-focused fund.
In October, mid-market India-focused private equity firm Lighthouse Funds raised $138 million for its fund India 2020 Fund II.
AION Capital Partners, a joint venture between Apollo Global Management and ICICI Venture, raised $825 million in a special situations fund in 2014 and in the same year, IDFC Alternatives also raised a large infra PE fund.
The biggest India-focused sector agnostic fund ever was raised by ChrysCapital. The PE firm had received commitment for a record $1.25 billion for its fifth fund in 2007, at the peak of the previous bull-run in the market and fast paced growth in the economy. But in 2010, ChrysCap slashed the size of that fund to $950 million.
This remains the largest India-dedicated private equity fund raised to date, excluding infra funds raised by 3i and IDFC. WestBridge Capital last year added $575 million to its evergreen fund to take its committed capital to $1.4 billion. This makes it the single-largest running PE-styled investment fund dedicated to India.