Motilal Oswal Private Equity Advisors Pvt Ltd (MOPE) has made the first investment from its second fund called India Business Excellence Fund II, by putting in Rs 35 crore ($6.5 million) in Magicrete Building Solutions Pvt Ltd, one of the top manufacturers of autoclave aerated concrete blocks (AAC blocks).
The fund has taken a significant minority stake in the company and MOPE expects the business to grow 5x in the next three years.
Vishal Tulsyan, CEO and managing director at MOPE, said, “We strongly believe in first-generation entrepreneurs as even we are one of them and there are significant opportunities for them. As for Magicrete, it was started by IITians some five years ago and concrete blocks are now replacing traditional bricks in both residential and commercial segments. We see it as a great business opportunity and outstanding entrepreneurs.”
Magicrete was started by IIT alumnus Sourabh Bansal back in 2008, along with Puneet Mittal, a chartered accountant, and Sidharth Bansal, an IIT-IIM alumnus, who later joined the venture. The financing was provided by a group of unnamed angel investors in Surat.
MOPE is currently raising its second fund and is yet to mark its final close. It has already raised close to Rs 600 crore and is looking to close the fund by raising Rs 750 crore ($150 million). In another three weeks’ time, the fund is looking to strike 2-3 investments in the consumer goods and financial services sector.
MOPE is looking to invest at the upper band of its average investment profile. It usually invests in the range of $5-15 million.
IBEF was launched in 2007 with a corpus of Rs 550 crore and is fully invested across 13 portfolio companies across sectors such as food processing, bulk packaging, power transformers and power infra enablers, ITeS, financial services, EMS, FMCG, auto components, etc. It has already made three partial exits.
MOPE also has a separate real estate fund and it is planning to launch the second realty fund in a few months where it is looking to raise close to Rs 500 crore.
(Edited by Sanghamitra Mandal)