Motilal raises $155m for India

The country manager has raised two funds to invest across a number of sectors in India, having returned 37% of its first vehicle back to LPs.

The private equity arm of India’s Motilal Oswal Financial Services has raised $155 million across two vehicles, according to the firm. The funds will co-invest alongside each other.

One fund, which raised $105 million, collected capital from international institutional investors including the International Finance Corporation, as well as funds of funds FLAG-Squadron and Axiom Asia.

The other vehicle raised INR 3.6 billion (€41 million; $54 million) from domestic LPs, including Motilal Oswal Financial Services, high net-worth individuals, family offices and the Motilal team. 

The fundraising environment is somewhat challenging both domestically and otherwise because what I hear from LPs is that realisations from India in their portfolio have been significantly less than other geographies

Vishal Gupta, director, Motilal Oswal

The two vehicles are the firm’s second fundraising effort, having raised a $125 million fund in 2007. Its successor has the same sector agnostic strategy, investing in mid-market, unlisted businesses in India. 

While the firm successfully passed its $150 million target, the fundraise took two years, having launched the vehicles in August 2011. The funds combined had a hard cap of $175 million. 

“We had to work quite hard, but in the end we got what we wanted so to that extent are quite happy. The fundraising environment is somewhat challenging both domestically and otherwise because what I hear from LPs is that realisations from India in their portfolio have been significantly less than other geographies,” Vishal Gupta, director at Motilal, told Private Equity International. 

Although fundraising has been tough, a number of funds have successfully raised capital for India recently. Lighthouse made a first close on $60 million for its latest vehicle in August, targeting $125 million, PEI reported earlier. Moreover, Kedaara Capital raised over $500 million for India buyouts, just months after Tata Capital closed a $600 million vehicle for its Tata Opportunities Fund – one of the largest fundraises for India in recent years.