World Bank’s International Finance Corporation (IFC) said it has proposed to invest up to $20 million (Rs 150 crore) in the third fund of mid-market private equity firm Faering Capital Advisors.
The investment will be capped at 20% of the final fund size, said IFC in a disclosure.
Faering Capital International Growth Fund III aims to raise $300 million.
IFC also said that it proposes to invest another $20 million in potential co-investments in the new fund's portfolio companies.
Faering Capital is led by Aditya Parekh, son of HDFC Bank chairman Deepak Parekh, and Sameer Shroff.
The private equity firm raised $150 million for its first fund and $200 million for its second fund. IFC was also a Limited Partner (LP) in Faering's second fund.
The third fund will continue to focus on growth stage mid-market companies in financial services, consumer and digital, pharma and healthcare, and other sectors such as business services.
The new fund is expected to have an average investment ticket size of $15-40 million. It aims to invest in 10-12 companies.
Faering has invested in companies such as Utkarsh Micro Finance, Yellow Diamond chips maker Prataap Snacks Pvt Ltd, fintech startup TranServ, Avantha Power & Infrastructure, Gokaldas Intimatewear, Manipal Health Enterprises and Linkstreet Learning.
In November last year, it led an investment in beauty products e-tailer Plum.
IFC has an active LP portfolio in India. It also makes direct private equity-style investments and lends to companies in the country.
Last month, IFC made a commitment to invest $50 million in private equity firm Gaja Capital’s fourth fund.
IFC has also invested in a new private equity fund of India Alternatives and the second fund of healthcare-focused PE firm Quadria Capital. Besides, it has invested in venture funds of Endiya Partners, Chiratae Ventures and A91 Partners.