AVCJ

Kedaara closes second India fund at $750m

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Kedaara Capital has closed its second India-focused fund at the hard cap of $750 million after approximately six months in the market.

The private equity firm announced the fund at its annual general meeting in February – specifying a target of $600-650 million – and issued the private placement memorandum the following month. The final close was first reported by Livemint and has since been confirmed to AVCJ by sources in the LP community.

Kedaara was founded in 2011 by Manish Kerjiwal, formerly India head at Temasek Holdings, and Sunish Sharma and Nishant Sharma, who both previously worked for General Atlantic. They formed a partnership with Clayton, Dubilier & Rice and closed Fund I at $540 million in September 2013, with Ontario Teachers' Pension Plan (OTPP) coming in as anchor LP.

OTPP is performing the same role in Fund II and all the other existing LPs have re-upped, AVCJ understands. New investors include Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) and insurance company Allianz.

The International Finance Corporation (IFC) said in May that it was considering a commitment of up to $40 million to the vehicle. According to a disclosure by the development finance institution, Kedaara Capital Fund II will target companies in the logistics, packaging, chemicals, pharmaceuticals and financial services sectors.

There have so far been two exits from Fund I. Kedaara secured a partial exit from automotive components maker Bill Forge in September 2016 as Mahindra CIE Automotive agreed to buy the company for INR13.1 billion ($200 million). The GP, which paid INR3 billion for a 46.88% stake in Bill Forge in January 2015, received a combination of cash plus shares in publicly-listed Mahindra CIE.

Another exit came in June as Au Small Finance Bank – formerly known as Au Financiers – went public. A second IPO is pending, with Kedaara expected to sell a portion of its stake in Mahindra Logistics.

Prior to the Kedaara final close, a total of $2.2 billion had been raised for India-focused private equity funds in 2017, with 22 vehicles achieving partial or final closes. This compares to $6.5 billion across more than 40 funds in 2016, the most raised in eight years. Other significant closes in 2017 include ChrysCapital, which raised approximately $600 million for its seventh fund.

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