UK’s development finance institution CDC Group plc is investing $50 million or Rs 245 crore into Pragati India Fund Ltd.
Currently, Pragati is targeting a corpus of $100 million. With the CDC Group committing about 50 per cent of the total amount as anchor investment, it is very likely that Pragati will be able to raise the remaining amount.
Incorporated in 2011, Pragati India Fund is led by Narayanan Shadagopan. The PE fund focuses on early-growth-stage investments and plans to partner with talented entrepreneurs delivering quality goods and services in high growth markets.
Pragati’s initiative comes at the backdrop of a difficult fundraising environment as about 60 PE funds from India are already trying to raise money. Amarchand & Mangaldas advised Narayanan Shadagopan on the transaction while KPMG was the India tax advisors to the fund, according to a press statement.
So far, CDC has invested around $1.2 billion (Rs 6,000 crore) in India. Incidentally, 95 per cent of this had been towards equities and the bulk of the investment had been done through private equity (PE) funds. The CDC Group, founded as the Commonwealth Development Corporation in 1948, has been investing in India for more than two decades. Earlier, the firm used to make direct investments through CDC Capital Partners but its private equity unit was spun out as Actis in 2004. Since then, CDC has been operating as a fund of funds and remains a key sponsor of the funds launched by Actis.
CDC plans to invest up to £800 million ($1.3 billion) in South Asia by 2015, which includes countries like India, Pakistan, Bangladesh, Sri Lanka, Afghanistan, Nepal and Bhutan. It also plans to deploy £1.2 billion ($1.95 billion) in the Sub-Saharan Africa region in the next five years.
India is already the single largest investment destination for the CDC Group, followed by countries like China, South Africa and Nigeria. CDC has invested more than $1 billion since 2004 in Indian funds, managed by PE firms like ICICI Ventures, Actis, Avigo Capital Partners, Baring India, IDFC Private Equity, India Value Fund Advisors and Aureos.
Last year, CDC also made its first commitment to an early-stage fund by committing $12.6 million to Seedfund II. The company said that it was looking to invest in emerging segments like education.
CDC Group also aims that by 2015, debt and direct investments will constitute 20 per cent each of its portfolio.