Latest news with #MohamedGouled
Time of India
4 hours ago
- Business
- Time of India
IFC pledges $60 million to Motilal Oswal's new fund targeting India's mid-market companies
The International Finance Corporation (IFC) has committed $60 million to a new private equity fund launched by Motilal Oswal Alternates, as part of its strategy to support mid-market companies in India. The deal also includes a $60 million co-investment envelope, allowing IFC to participate in individual transactions alongside the fund. The investment was announced on Monday and will go to India Business Excellence Fund V G, the fifth fund managed by MO Alternates, a unit of Motilal Oswal Financial Services . The fund is targeting a total size of $750 million, with an option to raise an additional $150 million. According to IFC, the capital will be used to invest in 12 to 16 mid-sized Indian companies, with a focus on expanding business activity beyond major cities into lower-income and less-developed regions. The fund will also aim to increase women's participation in the workforce at its portfolio companies, with IFC assisting in the design of workshops and workplace standards. Mid-market companies, typically constrained by limited access to formal credit, have increasingly turned to private equity for growth capital and operational support. IFC said it invests in such funds to help businesses scale, create jobs, and improve competitiveness. 'IFC's investment aims to leverage private capital and solutions to boost job creation, promote inclusive and sustainable growth, and support India's transition to a higher middle-income country. It's critical to provide capital to companies in this mid-market segment to help India maintain economic growth to absorb additional employment and equitable access to opportunities,' said Mohamed Gouled, IFC's Vice President of Industries. This is IFC's third investment in a Motilal Oswal-managed fund. It had previously invested $25 million in the firm's second fund and $35 million in its fourth. In addition, IFC co-invested $10.4 million in VVDN, an electronics manufacturer, alongside the fund. Motilal Oswal Alternates manages over $2 billion in assets across private equity and real estate. Over the past two decades, it has invested $1.1 billion in 50 companies. According to data shared by the firm, it has recorded a gross multiple of 5x and a gross internal rate of return (IRR) of 26% on Indian currency terms across its investments. IFC, a member of the World Bank Group, focuses on private sector development in emerging markets. In fiscal year 2024, it committed $56 billion globally through a mix of financing and partnerships with private investors. ETMarkets WhatsApp channel )
Mint
a day ago
- Business
- Mint
IFC invests $60 million in Motilal Oswal Alternates's $750 million fifth fund
The International Finance Corporation has invested $60 million in Motilal Oswal Alternates's fifth fund in a deal that will allow it to co-invest in the Indian private equity firm's portfolio companies. This is the World Bank Group company's third and largest equity investment in an MO Alternates fund. The India Business Excellence Fund V G managed by MO Alternates focuses on mid-market companies in the consumer, financial services, life sciences, and manufacturing sectors. IFC's investment in it comes attached with a $60 million co-investment envelope that will allow it to invest in companies alongside MO Alternates's latest fund. Equity co-investment enables banks like IFC to invest in future investments made by a venture capital or private equity firm without paying high fees. 'IFC's investment aims to leverage private capital and solutions to boost job creation, promote inclusive and sustainable growth, and support India's transition to a higher middle-income country,' said Mohamed Gouled, IFC's vice president of industries, in a statement. The India Business Excellence Fund V G fund has a target corpus of $750 million, with a greenshoe option for an additional $150 million. Over the course of the fund's lifecycle, MO Alternates plans to invest in 12-16 mid-market companies. It will target companies working not just in India's big cities but also in low-income states as well as tier-2 and tier-3 cities. 'IFC's investment in the fund sends a powerful signal to other investors, especially institutional investors, to invest in India,' said Vishal Tulsyan, managing director and chief executive officer of MO Alternates, in a statement. He added that the investment would act as encouragement to local fund managers to raise funds for investments in India's underserved regions. IFC had invested $25 million in MO Alternates's second fund, which had a corpus of $115 million, and $35 million in its fourth fund (sized at $550 million). Among the PE firm's notable investments are consumer lending startup Kreditbee, which was last valued at $700 million; non-banking financial company SK Finance, in which MO Alternates invested ₹ 415 crore for a minority stake; and health insurance company Niva Bupa Insurance. In 2021, MO Alternates sold its entire stake of about 5% in India Energy Exchange for ₹ 325 crore, according to VCCircle. Its other notable investment exits include listed consumer firm Mrs. Bectors Food Specialties Ltd and electronic auto components manufacturer Uno Minda Ltd (formerly known as Minda Industries). MO Alternates's ₹ 500 crore first fund, from which it has exited, delivered an internal rate of return of 26.8%, according to the company's website. Investments from domestic private equity firms in Indian companies increased from 9% in 2012-2014 to 11% in 2022-2024, according to McKinsey & Co. The consulting firm attributed this to three factors: increasing number of domestic general partners (who manage a fund), larger fund-raising and fund sizes, as well as interest from limited partners (which invest in PE and venture capital funds) in India-specific portfolios as they look to diversify their investments.
