Oman India Fund bags 2x on ING Vysya exit

The mid-market firm has so far returned 67% of the capital from its $100 million debut vehicle across 3 exits.

Mumbai-based private equity firm Oman India Joint Investment Fund (OIJIF) has this week fully exited its shareholding in ING Vysya Bank, generating a 18.7 percent IRR and a 2x gain for its investors.

This latest exit means that 67 percent of its capital from its 2011-vintage debut fund has been returned to anchor investors, Oman sovereign wealth fund, State General Reserve Fund of Oman (SGRF) and India’s largest bank, State Bank of India (SBI), the firm told Private Equity International.

“Capital from the fund has been invested in seven deals, in which two have been fully exited and one is a partial exit,” OIJIF vice-president Ranabir Basu told PEI. “We’ve returned 67 percent of our capital to our investors with an average weighted period of about 39 months only.”

The SGRF and SBI each invested $50 million in OIJIF I, the firm’s 2011-vintage vehicle.

Aside from the sale of ING Vysa OIJIF exited explosives company Solar Industries India in 2015, reaping a 47 percent IRR and a 3.4x multiple. And in mid-2016, the firm partially exited Beaver Engineering, resulting in a 25 percent IRR and 1.9x return for its investors.

India has seen a build-up of exits in 2016 than previous years. According to Bain & Company’s Asia-Pacific Private Equity Report 2017, India recorded 107 exits in 2016 worth $14 billion, or a 29 percent increase compared with 2015, which was driven by a robust exit momentum, most notably in initial public offerings.

Noteworthy exits include KKR’s sale of Gland Pharma to Chinese conglomerate Fosun, CX Patrners and Capital Square Partners’ sale of business process outsourcing firm Minacs to US-based Synnex Corporation, as well as the sale of Apax Partners’ stake in Cholamandalam Finance in the open market.

OIJIF is currently raising capital for its second vehicle, OIJIF II, which is targeting $300 million. The firm began fundraising in May 2016 and held a first close two months ago on $220 million.

Fund II follows the same strategy as its predecessor fund, focusing on companies with a leadership position in their niche as well as those that have a strong competitive advantage. Basu added that Fund II will focus on investments in consumer and financial services.

For Fund II, the firm will pick up larger stakes in portfolio companies with a typical ticket size ranging between $25 million to $40 million, slightly larger than Fund I.

Similar to Fund I, the SGRF and SBI are anchor investors in Fund II but this time upping their commitments to a total of $200 million. Domestic institutions such as banks and insurance companies invested the remaining $20 million.

Basu said that the firm is looking to raise the remaining $80 million from investors across the globe, including sovereign wealth funds, pension funds, development finance institutions and family offices.

The firm expects to hit their fundraising target by the end of the year.