Aditya Birla launches maiden fund

Mumbai-based Aditya Birla Private Equity, an Aditya Birla Group subsidiary, has started raising capital for a sector-agnostic $250m fund.

Aditya Birla Private Equity has started fundraising for a $250 million India-focused fund. The Aditya Birla Private Equity Fund I has a hard cap of $350 million, Bharat Banka, managing director and chief executive officer of the firm, said in an interview.

Group chairman Kumar Managalam Birla’s family office has made a commitment of $100 million to the private equity business, Banka said. In this fund, it will commit 20 percent of the amount raised. The remainder will be committed to any subsequent funds, he added.

The firm will raise half of the fund’s capital from domestic investors and the remainder from international limited partners. Strong interest is being shown by domestic investors and commitments have already started coming in, Banka said. The fund is expected to see a first close either this quarter or the next.

The fund is sector-agnostic though it will focus largely on infrastructure enablers, consumer-facing businesses and manufacturing ancillaries. It will also invest in certain niche areas such as logistics, education, health care and media and entertainment.

On average, the fund will commit between $20 million and $25 million per transaction, going up to a maximum of $50 million.

The firm has already made two investments on behalf of the Birla family office – an investment in the Bombay Stock Exchange and the purchase of a 26 percent stake in retail chain V-mart. The investments have now been transferred to the Aditya Birla Private Equity Fund I.

Aditya Birla Private Equity has an investment team of 10 people, many who have private equity experience, having worked with the likes of Delhi-based ChrysCapital, UK’s Europa Partners and Mumbai-based IL&FS Investment Managers.

The $28 billion Aditya Birla Group has interests in the mobile telecom, financial services, business process outsourcing and branded apparel sectors, among others.

Other Indian conglomerates such as the Tata Group and the Reliance Anil Dhirubhai Ambani Group also launched their private equity businesses in 2008.