National Infrastructure and Investment Fund-managed India-Japan Fund, Thursday announced its maiden investment in listed player Mahindra & Mahindra Ltd’s last-mile mobility business.
The fund, floated in August, has signed a binding agreement to invest Rs 400 crore in Mahindra Last Mile Mobility Ltd, for a minority stake between 6.06% and 8.25% in the company, pegging the M&M arm’s valuation to up to Rs 6,600 crore.
With this investment, the India-Japan Fund will join the International Finance Corporation (IFC), the World Bank’s private lending arm, as an investor in the last-mile mobility firm, which houses Mahindra’s three-wheeler brands Alfa, Treo, Zor, and four-wheeler brand Jeeto.
“Together with our partners JBIC, we believe that our investment in MLMML should yield transformative results in the last-mile mobility domain, driving economic growth, generating employment and ensuring environmental sustainability,” said, Krishna Kumar G, partner, India Japan Fund, NIIF.
The fund, announced in October, has a corpus of about $600 million, with the government of India contributing 49% to the fund, and the Japan Bank for International Cooperation (JBIC) contributing the remaining corpus. It has a mandate to invest in areas including renewable energy, e-mobility and circular economic sectors such as waste and water management.
The announcement comes soon after NIIF appointed former Actis LLP executive Sanjiv Aggarwal as its chief executive officer and managing director, who will take up the role starting February. Currently, the quasi-sovereign wealth fund is being helmed by interim chief executive Rajiv Dhar, following the exit of Sujoy Bose.
Currently, NIIF manages over $4.9 billion of equity capital commitments across its four funds – Master Fund, Fund of Funds, Strategic Opportunities Fund, and the India-Japan Fund.
In May last year, VCCircle reported that the NIIF was planning to launch its second FoF with an aim to raise around $1 billion (over Rs 8,200 crore at then exchange rates). While the firm hasn’t made any comment on its plans, a closer look at the portfolio of its maiden fund-of-funds offers a glimpse into how the NIIF’s LP bets are helping companies across sectors as varied as renewable energy and waste management to affordable housing, healthcare and technology.
