India focussed mid-market private equity firm Nine Rivers Capital Management Ltd, Mauritius, has achieved the first close of its debut fund at $46 million. The fund aims to raise $125 million.

Despite the global meltdown in financial markets, the first closing, concluded in September 2008 saw the commitment from global investors primarily from USA.

Nine Rivers might be the only new fund manager that has been able to raise funds and subsequently invest them in the last 6-8 months. It recently made its debut investment of Rs 50 crore in Pranav Construction Systems.

Fundraising is becoming a challenge as institutional investors bleed owing to shortage of capital and stretched allocations. "It is an uphill task in the current times," said Sandeep Daga, founder director, Nine River Capital Management, Mauritius, an advisory client of Nine Rivers Capital Holdings Private Limited. Daga has nine years of private equity experience working with Axis Holdings, Frontline Ventures and ICICI Venture.

Nine Rivers plans to invest between $5-15 million in each company and taking a significant minority position. Though the firm is open to investing in public companies, it is not looking at buyouts or distressed opportunities now.

Focus On Infrastructure Offshoots

"We are focused on mid-market tier-II companies that basically serve into different infrastructure segments," said Daga. Nine Rivers is looking at high-value add companies that serve into sub-sectors like power, railways and transportation, aerospace, oil & gas infrastructure, etc.

It's not looking at general EPC contract firms but would look to invest in specialised EPC firms.The country’s infrastructure and allied services sector is set to get a fillip as government sets to increase infrastructure investments to 9 % of GDP by 2014. This spending is likely to see an increase in demand in the infrastructure services. 

"These are spaces where we see quite defensible business models coming up during current times," adds Daga. Nine Rivers will also be looking at companies serving the export market, especially the western markets. "Now that has to be rationalised, if not completely ignored," he said.  

Other areas that Nine Rivers is looking at are services that are direct beneficiary of consumer spending in India, says Daga. These are education, security and surveillance, healthcare and logistics firms serving retail space.

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