Shriram Group, the Chennai-based Rs 60,000 crore group conglomerate, has widened the scope of its private equity fund raise to mop up as much as Rs 1,600 crore for its non-finance holding arm.
Shriram Ventures, formed as the holding arm for companies as diverse as green energy, EPC, real estate and software services among others within the Group, was earlier looking to raise close to Rs 1,000 crore which has now been scaled up.
Shriram Group has been growing aggressively with its diversified financial product offerings under various companies and has been wooed by global blue-chip private equity players including TPG, ChrysCapital, Bessemer Ventures, Norwest Partner, Merrill Lynch and ICICI Ventures, so far. After establishing itself in this sector, Shriram Group is now finalising a blue-print to fast-track the expansion of its other businesses under a new holding arm, Shriram Ventures.
"We should be raising close to Rs 1,600 crore within the next couple of months. We are actively involved with global private equity funds and most probably we should be finalising the fund raise with two of them," a senior Shriram Group official told Business Standard.
With the fresh resources, Shriram Ventures will be putting its four main companies - Orient Green Power, Shriram EPC, Take IT Solutions and Shriram Realty on an aggressive expansion path. Of these, Shriram Realty is privately held and has a clutch of private equity investors in it and a part of the fresh resources could also be used to give an exit to the private equity investors. The aspect of investing in a holding company has been attracting immense interest from private equity investors which gives their investment an exposure to a bouquet of sectors which a company will be operating in.
While Kohlberg Kravis Roberts is close to investing in Apollo Hospital's holding company, it had earlier invested in the holding company of Coffee Day Group which has exposure to wealth management and logistics besides coffee retailing.
It is understood that KKR is one of the funds interested in investing in Shriram Ventures as well.
According to PwC, the late stage deals ranked second both in terms of value and volume of deals with an investment of $666 million from 20 deals, a two-fold growth in value and an 11 per cent increase in the number of deals in Q1'13. This increase in late stage investments comes in line with the overall growth in the private equity investments during mid of 2013, despite all the problems.
After a dismal first quarter, the PE investments in the second quarter of 2013 (Apr-June'13) have bounced back with more than double the value of investments. PE firms have invested $2.3 billion across 82 deals in this quarter despite a 3.5 per cent drop in the volume of deals. In comparison with the same quarter last year, i.e., Q2 '12, there has been an increase of 18 per cent in value despite a 29 per cent drop in the number of dealsThe Jan-Mar '13 period (Q1'13) had seen an investment of just $929 million through 66 deals.
