Kedaara surpasses $1b for third India fund

A final close came towards the end of June after robust demand from LPs saw the institutional hard cap edge past $1 billion, despite attempts to stay below this level, according to one source close to the situation. A second source confirmed that the final total is $1.08 billion, including the GP commitment. Existing LPs account for the bulk of the corpus. Kedaara declined to comment on fundraising.

Few independent domestic private equity firms have crossed the $1 billion threshold. ChrysCapital Partners scaled back its 2007-vintage fund to $960 million as big-ticket deals dried up. New Silk Route hasn’t returned to market since raising $1.38 billion in 2008. True North set a hard cap of $1.1 billion for its sixth fund in 2017 but revised the target to $800 million and ended up with $600 million.

However, $1 billion is unlikely to seem so meaningful as a handful of managers continue to raise larger funds. ChrysCapital appears to be on this trajectory, having raised $600 million for its seventh vehicle in 2017 and $867 million for its eighth in 2019. The two-year gap between vintages was attributed to the faster-than-expected deployment of Fund VII.

PE investment in India reached a record $43.5 billion in 2020 and the running total for 2021 is $31.7 billion. Much of this capital has gone into growth-stage technology deals, with Reliance Industries’ Jio Platforms attracting $20 billion in private equity and strategic money last year and expectations of a wave of domestic tech listings prompting a surge in pre-IPO deal-making this year.

Kedaara is not chasing those opportunities. The firm – established by Manish Kejriwal, formerly of McKinsey & Company and Temasek Holdings, and General Atlantic alumni Sunish Sharma and Nishant Sharma – has three key areas of focus: avoiding high entry valuations; doing control transactions and adding value through operating partners; and concentrating from the outset on delivering successful exits.

Fund I closed on $540 million in 2013 and Fund II hit its institutional hard cap of $750 million (the total is $795 million, including the GP contribution) within three months in 2017.

Of the nine investments in Fund I, six have been exited. Most recently, Warburg Pincus took out three investors in Parksons Packaging when buying a majority stake in the consumer goods packaging manufacturer for a reported INR22-23 billion ($296-309 million). Kedaara is said to have paid INR2 billion for a significant minority interest in Parksons in 2015.

Four more portfolio companies have completed IPOs (Mahindra Logistics, Au Small Finance Bank, Aavas Financiers, and Spandana Sphoorty Financial), although it is unclear which have been fully exited. A fifth, Vijaya Diagnostics, recently filed for a domestic listing. Meanwhile, Bill Forge and Manjushree Technopack were a trade sale and a secondary sale, respectively.

According to the second source, Fund I was marked at a 3.8x multiple and a 43% gross IRR – in US dollar terms – as of March 2021.

Kedaara’s most recently announced investment from Fund II is an INR5.87 billion carve-out of a nutraceuticals business owned by French pharmaceutical player Sanofi’s India unit. The private equity firm is making the acquisition – which has yet to close – via Universal Nutriscience, a partnership with Universal Medicare.

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• Topics
• South Asia
• Fundraising
• Buyout
• GPs
• India
• Kedaara Capital
• Fundraising