Motilal Oswal Private Equity announces launch of Rs 4,000 crore PE fund
Motilal Oswal Private Equity (MOPE), the private equity arm of Motilal Oswal Group, is launching its next growth equity fund.
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.
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.
Vishal Tulsyan, Managing Director and CEO of MOPE said “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.”
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’).
Tulsyan 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%.”
Overall since inception in 2006, the private equity firm has made 33 investments and have generated ~6x returns on its 14 exits till date.