IFC to back Gaja Capital's $250m India fund

A first close of at least $75 million on Gaja II is expected to take place by the end of 2013 or in early 2014.

The fund will provide growth capital to mostly small and medium-sized enterprises (SMEs) and unlisted mid-market firms in India. It will commit $15-30 million per investment in 6-10 fast growing companies as equity and equity-linked securities.

IFC was also among the backers of Gaja's first fund, a $180 million vehicle raised in 2008 that has made eight investments. Earlier this year the fund and a consortium of investors acquired a 50% stake in EuroKids International from Educomp Solutions, an ex-portfolio company.

Other investments include Carnation Auto, India's largest independent multi-brand auto sales and service network, Ratnakar Bank, Haldia Coke & Chemicals and Career Launcher Education Infrastructure. Exits include an IPO of Vishal Retail, specialist geo-engineering firm Bumi and Educomp Solutions.

This week IFC committed $15 million to LotusPool Capital, a private equity firm set up by executives from Actis and ePlanet Capital, which will also invest in SMEs in South India.

IFC invested $1.38 billion in India during the 2013 fiscal year, a 43% increase over the previous year. Globally, IFC has the largest exposure in India with a committed portfolio of $4.5 billion across 39 projects as of June 2013.

According to AVCJ Research, India-focused funds have received commitments of $1.9 billion for the year to October. This compares to $2.4 billion for 2012 as a whole, the lowest annual total since 2004.

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• Topics
• South Asia
• Fundraising
• India
• IFC
• Gaja Capital Partners
• SME