Nalanda Capital Pte Ltd, a Singapore-based private equity firm founded by former Warburg Pincus India MD Pulak Prasad, has closed its second fund with commitments of $475 million, as per its website.
Nalanda, which raised its first fund of $400 million in May, 2007, invests in listed companies or makes PIPE (private investment in public enterprises) investments. Nalanda’s limited partners (LPs) include endowments, foundations and family offices from the USA and Europe.
The private equity firm follows what it calls a ‘passively active’ style of investing, where it does not interfere but ‘selectively intervenes’ with the management of its portfolio companies. The fund looks to add value to companies in areas like strategy, M&A, corporate and financial structure, etc.
While the firm mostly invests through secondary-market purchases, it has also done some deals involving preferential issue. These include companies like Berger Paints and Vaibhav Gems, where it has also taken board seats.
Nalanda has invested in more than a dozen listed companies through its first fund and had been an active buyer when the markets crashed after investment banking major Lehman Brothers filed for bankruptcy protection. For instance, in December, 2008, it picked up 2 per cent-3 per cent stake in Chennai-based broadcaster Sun TV Network Ltd and sold its shares for over Rs 300 crore, making over 2.5x on its 14-month-old investment.
Another investment is in Page Industries (where it holds 10 per cent stake), a licensed manufacturer of the Jockey brand of innerwear in India, Sri Lanka, Bangladesh and Nepal. Nalanda had picked up the stake in October, 2008, at an average price of Rs 440-Rs 450, and is currently sitting with unrealised gains of around 4x its investment. Page Industries scrip closed on June 24 at Rs 1,771 per share.
The firm also has stakes in companies like Mindtree, Mastek, Triveni Engineering, Carborundum Universal and WNS.
Interestingly, the fresh fundraising from Nalanda Capital comes as several Indian private equity firms are looking to raise PIPE-dedicated funds.
Nalanda Capital was the first firm to raise PIPE-focused fund after Prasad had quit Warburg in 2006. An IIT Delhi and IIM Ahmedabad alumnus, Prasad was credited with leading Warburg’s investment in Bharti Airtel and still sits on the company board.
Earlier this year, the four managing directors of Sequoia Capital India – Sumir Chadha, KP Balaraj, Sandeep Singhal and SK Jain – left the firm to float a public markets fund under the banner of Westbridge Capital Partners, an entity they were originally part of. Westbridge is raising a fund of over $200 million. IL&FS Investment Mangers is also eyeing a PIPE fund.
Avendus Private Equity Investment Advisors Pvt Ltd, the private equity arm of the leading investment bank Avendus Capital, has also raised two funds.
It has recently closed its second fund at Rs 200 crore and is targeting a corpus of $100 million (Rs 450 crore) for its third fund.