International Finance Corporation (IFC), the private investment arm of World Bank, has committed at least $35 million in homegrown Motilal Oswal Private Equity's (MOPE) fourth fund, which is sized at over $588 million (Rs 4,500 crore).
Motilal Oswal PE has raised its target size for IBEF IV from its earlier plan to raise Rs 4,000 crore ($500 million). VCCircle had exclusively reported about the development in June last year.
IFC, the private investment arm of the World Bank, is set to invest up to $35 million (around Rs 268 crore), not exceeding 20% of total commitments with up to $20 million in a co-investment envelope in IBEF IV, the impact investor said in a disclosure.
MOPE’s parent Motilal Oswal Financial Services Ltd will be the sponsor of the fund. The company’s spokesperson declined to comment on the fund’s other investors.
The fourth fund, which will be managed by Motilal Oswal Alternate Investment Advisors Pvt. Ltd led by Vishal Tulsyan and Raamdeo Agrawal, is much bigger than its third vehicle which marked the final close of raising capital at over Rs 2,300 crore ($320 million) in 2018.
A category II alternative investment fund (AIF), IBEF IV has been registered with the markets regulator Securities and Exchange Board of India (SEBI) through the India Business Excellence Fund IV G (GIFT Fund), a trust formed in Gujarat International Finance Tec-City.
“The master fund is targeting approximately $588 million (Rs 4,500 crore) in commitments to invest in 10-15 companies across the consumer, financial services, life sciences and niche manufacturing sectors,” the disclosure stated.
IBEF IV’s focus will continue on providing growth capital to mid-market Indian companies.
“The preference would be to invest in first-generation entrepreneurs building businesses with significant product and/or geographic leadership,” the Motilal Oswal PE had said after announcing the fund last year.
Its recent investment was in healthy snacks company, Happilo - also backed by A91 Partners - was from its third fund.
The third fund's investments also include MAS Financial Services, a Gujarat-based listed non-bank lender; Mysuru-based N Ranga Rao & Sons, India's largest maker of incense sticks, Ludhiana-based Happy Forging Ltd and Molbio Diagnostics Pvt Ltd.
The second fund was raised in 2013 with a size of Rs 1,000 crore ($155 million) and made 11 investments, with exits underway.
MOPE’s first investment fund, a 2007 vintage with a corpus of Rs 550 crore ($115 million), had made 13 investments and has fully exited the fund.
Including the four growth capital funds, Motilal Oswal PE also manages five real estate funds.
In a similar space, VCCircle recently reported about JM Financial PE's marking its first close of the third fund targeting a corpus of Rs 1,500 crore (around $200 million).
ICICI Venture Funds, one of the oldest domestic PE players in the country, is also in talks to raise at least $350-400 million (around ₹2,600-3,000 crore) for its fifth private equity fund.
Another key player IIFL Private Equity will also be raising Rs 2,600 crore for its pre-initial public offering (IPO) series fund.
