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Tata's PE Plans: $200-300 Million Fund Each For Tech, Mid-Caps

19 August, 2008

One of India’s biggest industrial houses, the Tata Group, has firmed up its private equity foray through its financial services arm Tata Capital Ltd (TCL). The firm’s Managing Director & CEO Praveen P Kadle has shed some light on the fund’s PE plans in an interview to The Financial Express. He said that the company will launch different private equity funds (of $200-300 million each) focusing on different sectors. To start with, the focus will be on technology, communications, healthcare and midcap space, the paper reported, quoting Kadle. A launch is expected in September this year.

Tata’s PE approach will be mainly to leverage the group companies’ relationships and contacts. So it will tap into the partners and suppliers of the group companies like Tata Consultancy Services (TCS), Tata Teleservices, Tata Communications and Tata Sky. There are several companies who need funds to scale up on technology and other aspects, but finance is a constraint. Though the focus will primarily be on growth and expansion-equity investments, the fund can also consider late-stage venture capital investments and buy-outs.

Tata Capital Ltd, launched in early 2007, is the financial services business of the Tata Group. It provide peronal loans, car loans, SME finance, infrastructure finance, distribution & broking, wealth management, capital markets, private equity, treasury risk management, and advisory services.

The Tatas are not the only major industrial house in the country who are planning a private equity foray. Last week it was reported that Anil Dhirubhai Ambani Group (ADAG) is launching a sector agnostic $2-billion private equity fund, which will make investment in the range of $50-75 million. R-ADAG has been making PE investments through Reliance Capital anyways.

Private equity arm of Aditya Birla Group, which was launched earlier this year, picked up a 25 per cent stake in Delhi-based retail chain V Mart Retail recently. It also picked up nearly 5 per cent stake in Core Projects & Technologies, an IT solutions provider, and also in Bombay Stock Exchange.

 


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Tata's PE Plans: $200-300 Million Fund Each For Tech, Mid-Caps

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