Nalanda Capital, a Singapore-based investment firm floated by former Warburg Pincus executive Pulak Prasad, has catapulted into the league of top-tier private equity firms in India after scooping up a large sum to invest in the country.
The Nalanda India Equity Fund has raised $728 million out of the targeted $800 million, as per a regulatory disclosure.
Nalanda had hit the market to raise $620 million in 2016 but didn’t disclose whether it eventually raised the amount. A year later it disclosed it was looking to raise $230 million more through another vehicle, the Nalanda India Fund 1.
It could not be immediately ascertained if Nalanda rejigged the fundraising plans of 2016-17, aiming to pull in $800 million instead of $620 million, or if this is an entirely fresh corpus.
The investment firm had raised $400 million for its first fund, the 2007 vintage Nalanda India Fund 1, and mopped up $475 million for the 2011 vintage Nalanda India Equity Fund. Overall, Nalanda has likely raised a total corpus of $1.7 billion.
An email query sent to Nalanda Capital seeking clarification on the firm’s total corpus did not yield a response till the time of publishing this report. As a matter of policy, Nalanda never responds to media queries.
The latest fundraise takes Nalanda's corpus in the same league as Indian PE firms True North, ChrysCapital, WestBridge Capital and Everstone Capital. WestBridge, for instance, had a corpus of $1.55 billion before it hit the road to raise fresh capital last month.
Prasad, an IIT-Delhi and IIM-Ahmedabad alumnus, joined PE giant Warburg Pincus in 1998 from McKinsey & Co. He set up Nalanda in May 2007 along with Anand Sridharan, a former director at US-based PE firm Bessemer; former Warburg colleague AN Seshadri, Merrill Lynch banker Ashish Patil and Gaurav Kothari.
Nalanda is not a typical PE firm. It invests only in publicly listed companies, like a mutual fund, but its investment style is more like a PE firm.
Usually, PE firms stay invested in their portfolio companies for four to seven years, though they may exit sooner in certain cases and may stay invested for a longer period in others. Sometimes, they roll over the investment from one fund to another as they hit the life cycle of such funds.
In contrast, Nalanda considers itself to be permanent part-owners of high-quality publicly listed businesses. It invests exclusively in small- to mid-cap companies in India where it aims to be a large and long-term shareholder. Its strategy is to acquire at least 5% equity in portfolio companies.
The firm had been less active in making fresh bets in India last year as the stock market valuations climbed. This changed a few months ago as it invested in at least three companies.
In March this year, Nalanda bought a stake in one of India’s largest sanitaryware companies, Cera Sanitaryware Ltd. This was its first publicly disclosed investment in almost a year since acquiring a substantial stake in online marriage services provider Matrimony.com Ltd in March 2019.
Also in March this year, Nalanda bought a stake in diagnostics services provider Thyrocare Technologies Ltd in what was its first healthcare bet ever. It invested in engineering firm Thermax Ltd, too.
Nalanda's other prominent bets include Page Industries, WNS, Havells, Info Edge, Amara Raja Batteries Ltd and AIA Engineering. Click here to find out more on Nalanda's investment style.
