India Value Fund Advisors raises $500M in new fund, eyes final close at $700M

Private equity firm India Value Fund Advisors (IVFA) has raised $500 million (Rs 3,130 crore) to mark the first close of its new fund Indium-V. The investment firm is looking to complete the fundraising within three months with a total corpus of $700 million, it said on Wednesday.

This would make it one of the largest sector agnostic PE funds raised to invest in India in the recent past. Two other large funds with over $800 million corpus have been raised in the past one year. However, one of these was a special situations fund and the other was an infrastructure-focused fund.

For IVFA, which chases control-oriented deals, besides the conventional growth equity transactions in India, this is the fifth India dedicated fund. It was launched in November last year. Over 25 investors, including sovereign funds, pension funds and fund of funds from across the globe, have invested in this fund vehicle.

“This mandate is a vindication of our strategy of working closely with mid-market firms and supporting them through business cycles and the unique challenges of the Indian market,” said Vishal Nevatia, managing partner at IVFA.

The firm had raised $600 million in its fourth fund in 2009 which also had an initial target of $700 million but had to be reduced due to tough market conditions. Its predecessor had raised $400 million in 2007. Prior to that IVFA had raised $175 million in 2005 after starting off with a $35 million fund in 2000.

Currently, IVFA has a team of 25 investment and operating professionals with experience across investment and advisory services. The new fund will follow the same strategy of minority as well as control investments.

It will focus on mid-market companies in the consumer, healthcare, food, IT/ITES and financial services sectors.

IVFA has been active this year with two back-to-back deals last month alone. It led a new $80 million funding round in Magma Fincorp, along with Leapfrog and existing investor in the NBFC, KKR. This deal was routed through the new fund Indium V.

It also invested $50 million in radio taxi service provider Meru, a firm where it owns a majority stake.

Several PE and VC firms are on the road to raise new funds as positive sentiment around Indian economy has attracted investment interest from global LPs. Some have also raised new funds.

Venture Capital firm Accel Partners recently raised a $305 million India-focused fund while SAIF Partners, which makes both early stage VC investments as well as growth equity deals, raised $350 million in its new India fund.

Among the other sector-agnostic PE funds, Multiples is also close to raising its second fund with a target of $500 million.

(Edited by Joby Puthuparampil Johnson)

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