Private equity is an alternative investment class through which investments are made in private unlisted companies. The money to carry out these investments is pooled from HNIs and institutional investors.

Typically, the investment horizon for private equity funds in India is between 5-10 years. It also comes with the option to extend it on an annual basis.

Private equity funds come with higher minimum investment and hence the investment in private equity is restricted to HNIs and institutional investors. Investment professionals raise the capital and manage the funds. The funds are utilised to invest in unlisted companies and helps them to carry out their operational costs, scale up their business, acquire new technologies or undertake future acquisitions.

Asset management firms and wealth management firms have launched their private equity services to cater to their HNI and ultra HNI clients. The investment objective and the investment universe of these private equity funds can vary

IndiaNivesh also offers private equity services to our clients through our two funds viz. IndiaNivesh Growth & Special Situations Fund and IndiaNivesh Renaissance Fund.

IndiaNivesh Growth & Special Situations Fund:

IndiaNivesh Growth & Special Situations Fund is a Rs. 150 crore private equity fund aimed at creating high growth in direct investment opportunities. The focus of the private equity fund is small and micro businesses with a horizon of 4-6 years. This private equity fund is now closed for subscriptions.

Through this fund, we seek to acquire significant minority stakes in companies that help to create value for the business and investors. These companies have a positive cash flow from the early stages. Investment size of this fund ranges from Rs. 10 crores to Rs. 25 crores

Highlights:

Our management team has significant operational experience and works with investee companies at each step. This ensures that profitability arises at an early growth stage for future business expansion plans.

We are currently invested in asset-light B2C businesses, companies that offer disruptive technologies and services, retail consumption, agri-businesses as well as logistics.

IndiaNivesh Renaissance Fund:

IndiaNivesh Renaissance Fund is a proposed Rs.900 crore Alternative Investment Fund – (AIF) (CAT II) that will focus on “Turnaround Situations” in mid-sized manufacturing or consumer-driven businesses. It will invest in viable businesses experiencing temporary or transitional operating problems or businesses with strong operations but burdened with insufficient liquidity or excessive debt. The investment horizon for the fund is nearly 4-6 years with an average investment size of Rs.60 crores

Investment Factors:

Revenue: Sizable & scalable that can grow at least by 2x without major Capex

Sector in long-term growth trajectory

Strong turnaround potential post-fund infusion

Fund utilisation should be mainly towards working capital support and de-bottlenecking capacities.

Governance: Promoter willingness, integrity and management bandwidth

USP: Brand & distribution network, IPR, entry barrier, niche product & technology

The fund will actively engage with its portfolio companies by strategising, mentoring and monitoring to execute a successful turnaround.

The demand for private equity funds in India has grown exponentially in the last few years. Private equity investment allows investors to invest in various themes and get superior returns with moderate risk.