Homegrown private investment firm IndiaNivesh has made the first commitments from its maiden turnaround fund to chemicals firm Sebacic India Ltd and auto component maker Autoline Industries Ltd.
IndiaNivesh Renaissance Fund, along with its co-investors, has committed to invest Rs 33 crore (about $4.7 million) in Vadodara-based Sebacic India Ltd for a significant minority stake, according to a press statement.
In the process, Sebacic’s investor GVFL (formerly Gujarat Venture Finance Limited) will exit. US-based Wayzata Investment Partners, which is not selling stake, will continue to remain an investor with majority holding.
“This investment will enable us to quickly ramp up our production to meet the market demand and optimise our capacities within the next couple of years,” said Pankaj Pandya, promoter and managing director of Sebacic, in a release.
Incorporated in 2007, Sebacic manufactures sebacic acid and its by-products, which include mixed fatty acid, glycerin, sodium sulphate, and dioctyl phthalate. It has an installed capacity to manufacture 10,000 tonnes per annum of sebacic acid, according to the release.
Separately, the Renaissance fund has committed Rs 35 crore (about $5 million) in listed auto parts manufacturer Autoline Industries Ltd.
The investment will be mainly utilised for working capital purposes to meet the growing order book.
“The promoters also have committed Rs 18 crore in the form of equity and share warrants. These funds will help us to optimally manage working capital requirements and generate cash flows from operations in a sustainable manner,” said Shivaji Akhade, managing director of Autoline Industries.
Autoline Industries manufactures auto components including sheet metal components, foot-control modules, parking brakes, hinges and exhaust systems for large original equipment manufacturers (OEMs).
“Our theme is to invest in small and medium companies that are under-performing for want of working capital,” said KK Rathi, managing director of IndiaNivesh First Bridge Fund Managers, which manages the Renaissance Fund.
In November last year, IndiaNivesh had marked the first close of the Renaissance Fund at Rs 168 crore. It is aiming for a total corpus of around Rs 900 crore and is targeting both domestic and offshore investors.
The fund will focus on mid-sized manufacturing and consumer-driven companies facing financial stress due to lack of working capital.