IFC Invests in Motilal Oswal Alternates’ Fifth Fund to Help Indian SMEs Expand, Create Jobs in Consumer, Financial Services, Life Sciences & Manufacturing
IFC today signed an agreement to invest in Motilal Oswal Alternates’ fifth vintage fund (India Business Excellence Fund V G, also known as “IBEF VG”) to help mid-market companies in India expand, adopt advanced technology, and create jobs in sectors such as consumer, financial services, life sciences, and manufacturing.
IFC is making a $60 million equity investment in India Business Excellence Fund V G, which is managed by MO Alternates, the private investment arm of financial services conglomerate Motilal Oswal Financial Services Ltd. IFC’s investment in the fund will be made along with an additional $60 million co-investment envelope that will allow IFC to selectively invest alongside the fund in future deals.
The fund, with a target size of $750 million(with an additional green-shoe option of $150 million) will identify and support 12 to 16 mid-market companies with high growth potential, especially companies that can extend services beyond India’s major cities to low-income states. In addition to providing capital, IFC will help the fund manager improve women’s participation in the workforce at investee companies through workshops and standard setting.
“We are delighted to deepen our partnership with IFC, which shares our goal to provide growth capital to companies across India, including the distant Tier-2 and Tier-3 cities and help them expand,” said Vishal Tulsyan, MD and CEO of Motilal Oswal Alternates. “IFC’s investment in the fund sends a powerful signal to other investors, especially institutional investors, to invest in India. This will also encourage other local fund managers to raise funds that include investments in underserved regions and attract greater commercial institutional investors into the segment, thereby enabling upward mobility and livelihood enhancement in the region.”
Small and Medium Sized Enterprises (SMEs) play a crucial role in India’s economic development, but they often lack access to formal credit, especially during economic downturns. Increasingly, private equity is helping address the funding gap by providing capital and management expertise to help SMEs expand, create jobs, and strengthen financial sustainability. PE-funded companies tend to grow faster, create significantly more employment, and pay more taxes than comparable companies with no PE funding.
“IFC invests in private equity funds to help entrepreneurs and the private sector in emerging markets access growth capital, create jobs, drive innovation, and boost market competitiveness,” said Mohamed Gouled, IFC's Vice President of Industries. “IFC’s investment aims to leverage private capital and solutions to boost job creation, promote inclusive and sustainable growth, and support India’s transition to a higher middle-income country. It’s critical to provide capital to companies in this mid-market segment to help India maintain economic growth to absorb additional employment and equitable access to opportunities.”
This is IFC’s third fund engagement with Motilal, after investing $25 million in its second and $35 million in its fourth fund. IFC also co-invested $10.4 million alongside the fund manager in VVDN, an electronics manufacturing company. To date, MO Alternates has invested $1.1 billion in 50 companies.
“Our long-standing partnership with Motilal Oswal Alternates reflects a shared commitment to strengthening India’s mid-market ecosystem and driving impact at scale,” said Imad N. Fakhoury, IFC’s Regional Director for South Asia. “Through this anchor investment and co-investment envelope, we aim to support innovative mid-market companies across key sectors such as manufacturing, life sciences, and financial services. By unlocking capital for entrepreneurs—particularly in low-income states and underserved regions—we aim to accelerate private sector investment in national priority areas, creating jobs and driving sustainable growth.”
IFC’s private equity fund strategy aims to build a broader and more robust investor base by mobilizing more private capital investments to support companies in emerging markets. IFC has built long-term partnerships with established co-investors that extend beyond a single-project timeframe, helping mobilize funding to support companies through multiple fundraising cycles.
Above views are of the author and not of the website kindly read disclaimer
