Private equity firm Kedaara Capital Advisors Ltd is raising its second fund, three-and-a-half years after its maiden fund, and has received the support of International Finance Corporation.
IFC has proposed to invest up to $40 million (Rs 258.6 crore) in Kedaara Capital Fund II LLP, the World Bank’s private-sector investment arm said in a statement.
The private equity firm is tapping into both domestic and offshore investors for the second fund. The second fund seeks to invest across 10-12 mid-market companies in India. Its target sectors include logistics, packaging, specialty chemicals and ingredients, pharmaceuticals and finance, IFC said.
Kedaara Capital has not formally announced the fundraising process for the second fund but Mint reported in May that it was looking to raise $600-650 million.
The PE firm, which was founded in 2011, had overshot its target corpus for its first fund by raising $540 million from Canadian fund Ontario Teachers’ Pension Plan as the anchor investor and other sovereign funds, pension funds, family offices, fund of funds and endowments.
Kedaara Capital’s latest investment was in Hyderabad-based microlender Spandana Sphoorty.
The PE firm has also been active on exits. In September last year, Kedaara struck its second exit from a fairly young portfolio firm when it sold part of its holding in automotive components maker Bill Forge Pvt. Ltd to Mahindra CIE Automotive Ltd.
Prior to this, Kedaara Capital had sold part of its holding in AU Financiers India Ltd to high-net-worth individuals, insurance companies and family offices, marking a quick partial exit.
The private equity firm was founded by Manish Kejriwal, former India head of Singapore state investment fund Temasek, and Sunish Sharma and Nishant Sharma—who were managing director and principal, respectively, at global private equity firm General Atlantic in India.
IFC’s LP bets
IFC has both a direct investment practice and indirect exposure to Indian firms as a Limited Partner (LP) to local private equity and VC funds. This year it has proposed to invest in three VC funds.
Earlier in May, IFC said it proposed to invest $10 million in the first fund of Stellaris Venture Partners, an early-stage venture capital firm founded by former top executives at Helion Venture Partners.
In March, IFC said it planned to invest $3 million in Bengaluru-based early-stage venture fund Pi Ventures.
The World Bank arm also proposed to invest $20 million in IDG Ventures India’s third India-focused fund in January.
Fundraising by PE firms
A number of private equity firms have successfully closed their fundraising process in the past months while some are on the road.
Earlier this year, homegrown PE firm ChrysCapital Management Co overshot its $600 million target for its seventh fund.
Last year, Multiples Alternate Asset Management Pvt. Ltd wrapped up the fundraising process for its second fund to raise the fifth-largest sector-agnostic private equity investment corpus ever raised for India.
In December, Fairfax India Holding Corporation, part of India-born Canadian billionaire Prem Watsa’s Fairfax Financial Holdings Ltd, raised $500 million.