Tata Capital, the Tata Group’s non-banking finance arm, is looking to raise a fund that will invest in distressed companies and help them expand their equity base.
Praveen P Kadle, managing director and chief executive officer of Tata Capital, did not disclose the size of the proposed fund, but said that the details were expected to be finalised over the next four-five weeks.
The fund will be part of Tata Capital’s Special Situation Investment Business, which partners with distressed small and medium enterprises by investing in them and supporting their managements in effecting a turnaround.
In addition, Tata Capital has a 20 per cent stake in International Asset Reconstruction Company Private Limited, through which it will invest in bad debts, again aimed at helping companies in distress.
Kadle told Business Standard that the proposed equity fund would focus on manufacturing companies not part of the Tata Group.
Private equity is one of the key areas that Tata Capital, which was set up two years ago, is looking at. A few months ago, Kadle had talked about raising a fund of around $350-500 million.
At a press conference on Monday, he said Japanese financial services major Mizuho was helping the firm finalise the structure of the fund and decide on how to place it. “In the next six months, we will come back to you on this… The first fund will be a mid-market growth fund and, as we identify more opportunities, sector-specific funds may come,” Kadle told reporters.
He said Tata Capital, which also has a tie-up with Mitsubishi UFJ Securities, was working with Mizuho Securities to provide services such as investment banking and wealth management to those looking to invest in India as well as Indians looking to invest overseas.
He also said the non-banking finance company had a loan book of around Rs 8,500 crore, of which around Rs 5,000 crore comprised commercial loans. Consumer finance accounted for Rs 2,000 crore with the rest being investments, he added.
