Emerging markets-focused private equity firm Affirma Capital has scored an exit from Tirupati Medicare Ltd as part of a transaction that involves Kotak Alternate Asset Managers Ltd investing in the healthcare company.
The alternative asset management arm of Kotak Mahindra Bank said Wednesday it is investing Rs 1,050 crore ($122.5 million) in Tirupati Medicare through the Kotak Strategic Situations India Fund II.
The investment will support Tirupati's expansion plans and enable a complete exit for Affirma, which joined the company’s cap table in 2019, Kotak Alts said in a statement. It didn’t disclose the breakup of the primary infusion and the secondary purchase from Affirma.
Affirma separately said it recorded a 3x return in rupee terms from the exit and a 2.4x return in dollar terms.
The announcement comes nearly three weeks after VCCircle first reported that Kotak Alts was set to acquire a majority stake in Tirupati Medicare, offering an exit route to Affirma.
Eshwar Karra, managing partner at Kotak Alts, said Tirupati is the largest player in the Indian nutraceutical contract manufacturing space and is well-positioned to capitalize on the growth opportunities in the market.
For Kotak Alts, the deal follows its investment in GSK Velu's IPO-bound diagnostic chain Neuberg Diagnostics in January. Separately, VCCircle reported earlier in the day that the firm was in advanced talks to invest in a manufacturing company through the Strategic Situations India Fund II, which has a corpus of $1.5 billion.
Set up in 2005, Kotak Alternate Asset manages over $22 billion across different asset classes including private equity, real estate, infrastructure, special situations, and private credit. In the healthcare sector, Kotak Strategic Situations Fund II invested Rs 1,445 crore in June last year to part-finance Matrix Pharma Pvt Ltd's acquisition of Viatris Inc's Indian active pharmaceutical ingredients business.
Meanwhile, Affirma Capital manages approximately $3.2 billion in assets. It had committed $50 million to Tirupati Medicare in 2019 to fuel its organic and inorganic growth initiatives. The PE firm has been trying to sell its stake in Tirupati Medicare for over a year, VCCircle reported in December.
Affirma is also monetising its investment in another Indian company that it backed six years ago, VCCircle reported earlier this week. This exit moves come at a time when the PE firm is raising its maiden India-focused fund.
Tirupati Group, established in 2005, has grown into a value-added contract research and manufacturing company for nutraceutical supplements in India. The group counts over 200 customers, including major pharmaceutical players like Abbott, Cipla, and Dr. Reddy's Laboratories Ltd. Tirupati Medicare’s net sales rose to Rs 1,050 crore for the year ended March 2024 from Rs 969 crore in the previous year, VCCircle reported previously.
