Avendus launches third India PIPE fund

The fund will look to sectors that have benefited from India's rise in consumer spending, rapid urbanization and increased rural wealth.

In a statement, Avendus said many of India's 2,800 regularly traded companies - with a market capitalization less than INR50 billion - are under-researched, creating an opportunity for those funds willing to undertake in-depth evaluation.

The fund will be looking to invest in 12-14 high conviction mid-cap stocks, taking equity stakes of around 5% with an investment horizon of 2-3 years.

"The key differentiation of the fund is its active engagement style. There is major scope to improve investor relations and corporate governance of midcap companies," said Manoj Thakur, CEO of Avendus. "We identify potential winners in the midcap space and help them in their pursuit of becoming highly regarded companies by the investor community."

Avendus capital launched its first fund, Avendus Special Situations Fund I, in 2009. According to AVCJ Research, the $8 million vehicle invested in six companies, generatiing an IRR of 71.1%. Avendus claims its second fund, which closed at $100 million, has delivered compounded annualized returns of 21.9% since inception as compared to the BSE small-cap return of -3.3%.

This is the second notable India PIPE fund to be announced in 2013. Last month SBI Holdings and Edelweiss Financial Services said they had agreed to set up the EW SBIH Crossover Fund with a target of $100 million. The fund will focus on  investments in listed small and mid-cap companies.

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• Topics
• Fundraising
• South Asia
• PIPEs
• India
• PIPE
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• Avendus PE Investment Advisors