Paragon Partners, a $200 million private equity fund floated by Siddharth Parekh to provide growth capital for mid-market deals in India, has struck two new deals in the consumer and financial services sectors with a total investment of $15 million (Rs 100 crore).
It has invested Rs 75 crore in Cravatex Brands Ltd and Rs 25 crore in InCred Finance, the private equity firm said in a statement. The company had made the first close of its debut fund last year.
Cravatex Brands, which is a wholly-owned subsidiary of public listed company Cravatex, has a pan-India retail and distribution platform for lifestyle, sports and wellness products. It has an exclusive long-term licensing agreement with FILA, the Italian sportswear and lifestyle brand, for footwear, apparel and accessories.
“The opportunity to partner with global brands in the fast-growing sportswear and wellness industries driven by the strong Indian consumption story makes for a great investment thesis,†said Sumeet Nindrajog, co-founder and senior partner, Paragon Partners.
Cravatex Brands also has the exclusive distribution rights for global fitness equipment manufacturer Johnson Healthtech of Taiwan through its Proline Fitness brand.
Johnson Healthtech products, which are sold under Matrix, Horizon and Vision, compete with brands such as Cybex, TechnoGym, LifeFitness and Precor.
InCred Finance, which was founded by Bhupinder Singh, the former Asia Pacific head of investment banking, Deutsche Bank, is a technology-driven, new-age, non-banking finance company. It focuses on four lending verticals: affordable housing, small and medium enterprises, education and consumer finance. The company has already raised over Rs 550 crore from a set of marquee investors from India and overseas, including former Deutsche Bank co-CEO Anshu Jain last year.
“We believe that the company (InCred) is ideally positioned to benefit from a significant lending opportunity given the current levels of credit penetration in India,†said Parekh.
Paragon’s investments
With the latest deals, the private equity firm has so far deployed Rs 275 crore.
Paragon had made its debut investment in Mumbai-based privately held property construction firm Capacite Infraprojects Ltd. Its second investment was in engineering components maker Maini Precision.
Subsequently, Infina Finance Pvt. Ltd and private equity firm NewQuest Capital Partners had invested $21 million in the two Paragon-backed companies. Infina Finance, an investment company jointly owned by Kotak Mahindra Bank and the Kotak family, is a limited partner, or investor, in Paragon Partners.
The private equity firm, which was set up in August 2015, marked the first close at $50 million in March 2016.
Paragon focuses on five key sectors, including consumer discretionary, financial services, infrastructure services (capex light), industrials and healthcare services. The firm targets an investment size of $10-15 million as minority growth capital.
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