BanyanTree Growth Capital backs two Indian companies

The India-focused mezzanine firm has acquired minority stakes in an IT provider and chemical maker as it raises $125m for its debut fund.

BanyanTree Growth Capital has invested undisclosed sums in Trimax IT Infrastructure & Services, an IT product and service provider, and Kalpena Industries, a chemical compound manufacturer.

The investments were made out of the BanyanTree Growth Capital Fund, the firm’s maiden investment vehicle targeting commitments of $125 million. The firm has thus far raised $40 million from lead investors Dutch development agency FMO and German development finance institution DEG, Naval Totla, a director at the firm, said in an interview.

Totla declined to comment on the amount invested in the two companies or the stakes acquired. He also declined to comment on when the fund is expected to close.

Trimax provides system integration, facility management services, IT infrastructure solutions and remote infrastructure management services to clients.

Bombay Stock Exchange-listed Kalpena Industries manufactures chemical compounds such as PVC and PE for the power cable, packaging, pipe and footwear industries. It has three manufacturing plants.

The BanyanTree Growth Capital Fund makes “growth capital investments in companies and businesses in which there is strong potential and management capabilities are demonstrated”, Totla said. He added that the firm supports these companies in terms of capital infusion, and does not seek to change the management of its portfolio companies.

BanyanTree tries to have a co-investor in all of its deal. It invests in a mix of debt and equity, with its fund committing equity to the transactions and the co-investors providing debt.

The firm's five-person investment team has made three investments to date.