Motilal Oswal Alternates raises $800 million

MUMBAI: Motilal Oswal Alternates has closed an $800 million private equity (PE) fund, surpassing its initial target of $750 million, helped by strong backing from global and local investors, who chipped in to partake in India's growth story. The fund size can go up to $950 million, making it one of the largest funds raised by a local PE investment firm. This is first close for the fund and the final one is expected by Oct end.Through this fund, the company will cut cheques in range of $40-$80 million for mid-sized firms; the bulk of the capital will be deployed in sectors with high market opportunity - consumer, financial services, manufacturing and healthcare, sectors that have been seeing high investor appetite due to the sheer market opportunity. The fund has made two investments, amounting to $125 million.“We will only invest in profitable companies. Through the investments, we will look to acquire significant minority stakes in companies...some of them could be major investments wherein we will acquire controlling stakes either individually or in partnership with other PE funds,” Vishal Tulsyan, founder and chairman at Motilal Oswal Alternates told TOI. The fund will invest in companies with a 5-10 year horizon, taking a long-term view which is how PE investors like to bet. In India, consumption patterns are evolving rapidly, nudging businesses to explore new expansion avenues and seek growth capital which is fueling opportunities for investors. Within healthcare and financial services, the scope is large given that they are still underpenetrated. Motilal Oswal Alternates has backed firms such as Lahori Zeera, HealthKart and Lal Sweets. It was also the first institutional investor in companies such as AU and Dixon, making 50 investments in all since inception in 2007. “As India grows as an economy, there will be a lot of money in the wallet of consumers for discretionary spending. Consumption in India will see a secular growth trend,” Tulsyan said. Typically, about half of the exits (from investments) for the company through its previous funds have been by way of IPO. Tulsyan said that about 7-10 of the firm’s portfolio companies will go public in 12-18 months.