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Published on 20/07/2021 1:50:11 PM | Source: Motilal Oswal Financial Services Ltd

Motilal Oswal Private Equity announces launch of new INR 4,000 crore (~USD 550 million) PE fund By Mr. Vishal Tulsyan, Motilal Oswal

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Below are Quote Motilal Oswal Private Equity announces launch of new INR 4,000 crore (~USD 550 million) PE fund By Mr. Vishal Tulsyan, Managing Director and CEO of MOPE commented, 

Motilal Oswal Private Equity announces launch of new INR 4,000 crore (~USD 550 million) PE fund

Mumbai, 20 July 2021: Recognized recently as ‘Growth Capital Investor of the Decade’ by Venture Intelligence, Motilal Oswal Private Equity (MOPE), the private equity arm of Motilal Oswal Group, is launching its next growth equity fund – this will be the fourth fund for the home grown private equity firm which has been investing in the Indian private markets since 2007.

The investment strategy for the new Fund, India Business Excellence Fund IV (or IBEF IV), will be in line with the previous funds as MOPE continues its focus on providing crucial growth capital to mid-market Indian companies demonstrating strong long-term sustainable growth potential. As in the past, the preference would be to invest in first-generation entrepreneurs building businesses with significant product and / or geographic leadership.

In terms of focus sectors, IBEF IV plans to build a diversified portfolio of 10 – 12 investments across MOPE’s preferred sectors of consumer, financial services, life sciences and niche manufacturing. The Fund may also evaluate &selectively invest in emerging new age business models with digital / online distribution channels, within its preferred sectors.

The Fund has been set up as an alternate investment fund (AIF Category II) registered with stock market regulator SEBI. MOPE expects to achieve first close before December 2021 and conclude fundraising within 9-12 months.

Vishal Tulsyan, Managing Director and CEO of MOPE commented, “The PE/VC ecosystem in India has really come of age over the last decade and growth equity capital will continue to play a pivotal role as India moves from a USD 3 trillion economy to over USD 10 trillion in the next decade. With our proven track record of past 15 years, MOPE has established itself as a ‘partner-of-choice’ for Indian businesses and entrepreneurs with the capability and vision to take their enterprises to the next level. Despite the Covid-19 situation and restrictions across the country, we have been actively making new investments as well as delivering exits to our investors.”

“As with our previous funds, even with IBEF IV, we will continue to pursue our time-tested investment framework of QGLP (Quality, Growth, Longevity and Price) to back market-leading, mid-market companies in our preferred sectors, ”said Tulsyan.

MOPE has been one of the early proponents of ‘Make in India’ and having a strong conviction around emergence of themes such as electronics and auto components manufacturing in the country, the PE firm invested in companies like Dixon Technologies, Minda Industries and VVDN Technologies. The firm also has been distinctively able to identify winners in Tier 2 / 3 cities in India and back those early, e.g., Jaipur-based AU Small Finance Bank, Udaipur-based GR Infraprojects, Indore-based Symbiotec Pharmalab, Ludhiana-based Happy Forgings, and Mysore-based NR Group (maker of ‘Cycle Agarbatti’).

Continuing with his comments, Vishal mentions, “In the Indian private equity space, where most of the capital has been sourced from international investors, MOPE has been one of the few PE firms that has raised a substantial portion of the funds from domestic investors, in turn opening up the asset class to this investor base – ~50% of the capital (excluding the group & team’s commitment) across the existing three funds have been raised from domestic investors. Adhering to the philosophy of “high level of skin in the game”, the group & team’s commitment to IBEF IV is expected to be 18-20%.

We are thankful to our investors for their faith with us in this journey so far and excited to again offer the MOPE platform to like-minded partners across global and domestic institutions, family offices and HNIs.”

MOPE’s first fund, a 2007 vintage, INR 550 crore (USD 115 million) fund made 13 investments and recently fully exited the fund with an IPO of GR Infraprojects (a leading road EPC company)which was subscribed 100+ times, the highest oversubscription in the sector for over a decade. Other remarkable exits from Fund 1 include AU Financiers (now, AU Small Finance Bank) and Dixon Technologies, both of which delivered more than 10x returns. Overall, Fund 1 made 6x+ returns and clocked an IRR of ~27% at the gross level in INR terms.

The PE firm’s second fund, raised in 2013, was an INR 1,000 crore (USD 155 million) fund and made 11 investments, of which one exit is already completed while multiple others are underway.

MOPE raised its third &latest INR 2,300 crore (USD 320 million) fund in 2018 – this fund is already 90% committed across 9 investments. Molbio Diagnostics, which fund 3 invested in at the beginning of 2020, is the country’s largest molecular diagnostics platform and has been at the forefront of Covid testing in India, since the onset of the pandemic. MOPE also invested in Bangalore-based KreditBee, one of the largest players in personal loan segment, marking its debut investment in the fintech space.

Overall since inception in 2006, the private equity firm has made 33 investments and have generated ~6x returns on its 14 exits till date.

 

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