Private equity firm TVS Capital Funds Ltd is planning to raise an additional Rs 500 crore for its TVS Shriram Growth Fund-I, by December.
The fund was launched in 2008 as a domestic growth equity fund, focusing mainly on mid-cap companies.The sponsors, the TVS Group and the Shriram Group, raised Rs 600 crore. Said TVS Capital's chairman and managing director, Gopal Srinivasan: “We are planning to raise the (additional) money from Indian domestic financial institutions (who invested Rs 200 crore last time) and high net worth individuals (invested Rs 250 crore last time).”
The add-on fund would have Rs 400 crore, with an over-allotment option of Rs 100 crore. The fund will take retail investment through ICICI Bank and HDFC Bank, and from institutional investors through Centrum Capital.
Srinivasan said the fund would be ideal for investors who can invest a minimum of Rs 25 lakh and wait for five to 10 years for the return. “The sectors which the fund will focus on will give a return of 2.5-3 times, but this will take some time,” said Srinivasan.
So far, the fund has concluded nine deals. It expects to close a 10th deal in the next two months, in the agriculture business segment. The investment may either be from fund 1A (the first) or a combination of 1A and the top-up, 1B, if a big deal comes,” said Srinivasan. “We are currently looking at an investment of Rs 70-100 crore in the 10th deal.”
The fund’s investments have seen growth of three to four times, with around 25 per cent annual return for the investors. Almost 80 per cent of the fund is in the education, retail and food sectors. Some of the major investments are in Om Pizza & Eats, MedPlus Health Services, Landmark Ltd (a book and music retail chain owned by Tata Group’s Trent), Mediaworx, TVS Logistics and Dusters/Total Solutions.
“We are looking at consumer consumption-driven opportunities for investment and, sometimes, collateral opportunities. We may also look at one or two investments in manufacturing, but that would be after cautious analysis of the sector and the strengths of the company,” said Srinivasan.