India's Motilal Oswal closes latest fund at $552m

About 75% of the capital was raised from domestic high net worth individuals (HNWIs) and family offices widely dispersed across 55 cities. Bangalore alone accounted for more than INR 5bn of the commitments. Only two other cities, Gurgaon and Rajkot, crossed the INR 4bn threshold.

Motilal Oswal Alternates (MO Alts), formerly known as Motilal Oswal Private Equity, emphasises that is one of the few local GPs to raise primarily local money and consequently positions itself as an important PE ecosystem creator.

“For India to achieve its dream of USD 10trn economy by 2030-2032, private capital will play the most pivotal role, and towards this, it is important that we create a strong ecosystem for raising domestic capital and become somewhat self-reliant,” MO Alts CEO Vishal Tulsyan said in a statement.

“Over the past decade, more than 50% of private capital that got invested in China was raised locally. For India, that number is abysmally low, but over the next 10 years, if we – industry and government – put in effort towards this direction, there is no reason why we will not be able to achieve similar numbers.”

The new fund received USD 32.8m from the International Finance Corporation, an existing LP. Its predecessor closed on INR 23bn in 2018. MO Alts’ assets under management now stand at around INR 140bn, including a series of real estate funds.

The new fund is expected to make 10-12 investments with a particular focus on consumer, financial services, life sciences, and niche manufacturing. Some 10-15% of the corpus has been earmarked for tech-enabled businesses, acknowledging the recent traction in the Indian start-up scene.

There have been two investments to date: Simpolo, one of the largest players in India’s premium tile segment; and Pathkind, a diagnostic chain promoted by Mankind Pharma. Mankind, which has several separate PE backers, filed for an IPO last month that is expected to be among the largest in the local pharma space.

Most portfolio companies will be located in tier-two and tier-three cities. Simpolo, for example, is based in Morbi, a city of 400,000, including surrounding areas. Other investments under this theme include Indore-based Symbiotec Pharmalab, Ludhiana-based Happy Forgings, and Mysore-based NR Group.

Last week, Goa-based Molbio Diagnostics, a COVID-19 test kit maker that MO Alts has backed since early 2020, secured a USD 85m round featuring Temasek Holdings at an enterprise valuation of USD 1.6bn.

“[MO Alts] has been instrumental in spreading the availability of private equity as a long-term, patient source of capital outside the financial and commercial hubs and large metros in the country, and many of these businesses have gone on to become multi-billion-dollar organisations,” Tulsyan added.

MO Alts has made 37 investments and completed 15 exits to date. Its first private equity vintage raised INR 5.5bn in 2007, while Fund II closed on INR 10bn in 2013. Standout investment activity includes early deployments to Jaipur-based AU Small Finance Bank and Udaipur-based GR Infraprojects, which went public in 2017 and 2021, respectively.

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• Topics
• Fundraising
• Growth
• GPs
• India
• Motilal Oswal Private Equity
• IFC
• healthcare
• Technology
• Financial Services
• Consumer
• manufacturing
• Growth capital