TVS targets $230m for debut fund for India

TVS Capital, the subsidiary of a diversified Indian conglomerate, has raised $115m for a consumer-driven growth capital fund.

TVS Capital Funds, a Chennai-based asset management company, has raised 5 billion Indian rupees ($116 million; €73 million) from domestic investors for an India-focussed fund which is targeting a final close on 10 billion rupees within the next 12 months.

Suresh Raju, executive director at TVS Capital, told PEO that TVS Shriram Growth Fund is “a mid-cap fund that will invest in businesses that are regionally focussed. It will be targeted at emerging cities which have a lot of untapped opportunities in the consumer consumption-driven businesses”.

The fund will invest in sectors such as healthcare delivery, privatised education, hospitality, specialty retail, food and agro, and consumer media and entertainment. It will commit between 100 and 500 million rupees per transaction for the purpose of acquiring a strategic minority interest and active participation on the board.

Raju said: “With a large and growing consumer base, rising incomes and changing lifestyles, India is expected to become the world’s fifth largest consumer market over the next couple of decades, and this fund is designed to tap this opportunity.”

He added that with the first round of fundraising nearing completion, the fund could make six to eight investments in the coming 12 months.

TVS Capital Funds is a subsidiary of the TVS Group, a diversified conglomerate in India. TVS Group, and Shriram Group, a financial services network, are sponsors of the fund with commitments of about 500 million rupees each. Raju said that while TVS will manage the fund, Shriram Group is a strategic partner and will support TVS through its network of clients and in terms of logistics.

Of the remaining capital, Raju said that 600 million rupees was raised from the board of directors, partners in the fund, friends and family; 2.2 billion rupees from high net worth individuals and corporates; and 1.2 billion rupees from public institutional banks and insurance companies.

The second tranche of capital will be raised exclusively from offshore limited partners.