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Motilal Oswal Alternates announces final close of India Business Excellence Fund IV at INR 4,500 crore

Mumbai 03-Oct-2022

Motilal Oswal Alternates announces final close of

India Business Excellence Fund IV at INR 4,500 crore

01 October 2022, Mumbai: Motilal Oswal Alternates (MO Alts) has announced final close of India Business Excellence Fund IV (IBEF IV), its fourth private equity fund, with commitments aggregating INR 4,500 cr. The fund has been primarily raised from domestic high net worth individuals (HNIs) and family offices. With this fund, the cumulative AUM raised under MO Alts. MO Alts platform between growth capital and real estate shall stand at around INR 14,000 cr.

In the Indian private equity space, where traditionally most of the capital has been sourced from international investors, MO Alts has been one of the few PE firms that has raised a substantial portion of the funds from domestic investors thus creating a strong ecosystem for this asset class in India. Approximately 75% of the capital in aggregate across all the funds has been raised from domestic investors across 55 cities in the country. As per Vishal Tulsyan, MD & CEO of MO Alts “For India to achieve its dream of USD 10 tn economy by 2030-2032, private capital will play the most pivotal role, and towards this it is important that we create a strong ecosystem for raising domestic capital and become somewhat self-reliant. Over the past decade, more than 50% of private capital that got invested in China was raised locally. For India, that number is abysmally low, but over the next 10 years, if we (Industry and Government) put in effort towards this direction there is no reason why we will not be able to achieve similar numbers”

The private equity firm has, since inception, made 37 investments and have completed 15 exits. This is the fourth growth capital fund raised by MO Alts.
MO Alts’s first fund, which is a 2007 vintage, INR 550 crore (USD 115 million) fund made 13 investments. Some of the notable investments in  Fund 1 include AU Financiers (now, AU Small Finance Bank), Dixon Technologies, Minda Industries and GR Infraprojects. Many companies in terms of valuation over a period of 10-15 years have become over 100x of the entry valuation of MO Alts.  

Other notable investments made by MO Alts have been in companies like Updater Services (a leading facility management and business services company), Molbio Diagnostics (world’s first point-of-care molecular diagnostics platform and was at the forefront of Covid testing in India), Kreditbee (one of India’s largest and most profitable fintechs) and Happilo (one of India’s fastest growing healthy snacking brands).
MO Alts has also been one of the early proponents of ‘Make in India’ and believer in India’s potential as a manufacturing & innovation hub for both domestic and global marketplaces. Investment in Dixon Technologies in 2008 was driven by reducing India’s dependence on electronics import. Dixon today is a leading EMS company in India. And in continuation, MO Alts have invested in VVDN technologies, one of India’s leading design led electronics manufacturing companies. Such companies have the potential to leverage on China plus one strategy and lay the foundation for making India a global electronics manufacturing hub.

The Fund will continue to leverage its proprietary QGLP (quality, growth, longevity and price) investment philosophy to replicate the discipline and success of quality investing in IBEF IV. The fund shall be a sector agnostic fund, with a special focus on consumer, financial services, life sciences, and niche manufacturing. On account of the prospering Indian start up ecosystem over the past few years, the fund hopes to evaluate businesses in tech enabled space and expects to deploy 10 – 15% of its capital there.
The Fund has already made 2 investments - in Pathkind, India’s leading diagnostic chain promoted by the Mankind pharma group, and Simpolo, one of the largest players in India’s premium tile segment. In addition, there are two investments where definitive has been signed. MO Alts expects to commit around 50% of the Fund by March 2023.

MO Alts started its journey in 2006-07, and was conceptualized with the vision to provide crucial growth capital to Indian entrepreneurs in the mid-market space building companies with long-term sustainable growth prospects within the fundamental sectors of the economy. Being part of the Motilal Oswal group has also been a differentiating feature for the MO Alts business given the strong brand recall of the group as well as deep understanding of equity capital markets, which has created an edge for MO Alts across the investment lifecycle from sourcing to exit, in a competitive private equity world.

One of the most unique aspects of MO Alts’s investment journey has been the team’s ability to identify winners in Tier 2 / 3 cities in India and back them early. A few such names to highlight would include Jaipur-based AU Small Finance Bank, Udaipur-based GR Infraprojects, Indore-based Symbiotec Pharmalab, Ludhiana-based Happy Forgings, Goa-based Molbio Diagnostics, Mysore-based NR Group (maker of ‘Cycle Agarbatti’), Morbi based Simpolo. According to Vishal Tulsyan, “The firm has been instrumental in spreading the availability of private equity as a long-term, patient source of capital outside the financial & commercial hubs / large metros in the country and many of these businesses have gone on to become multi-billion dollar organizations”.

Commenting on the fund close, Vishal Tulsyan, “The Indian PE/ VC ecosystem has witnessed phenomenal growth and maturity over the past decade, and is poised to play a central role in the journey of the Indian economy from USD 3 trillion to USD 10 trillion. With our proven track record and discipline, we continue to attract visionary businessmen who are passionate about creating path breaking enterprises. We have been investing at a great pace from the fourth fund and are truly excited at partnering with investors across global and domestic institutions, family offices and HNIs in this growth journey.”

About Motilal Oswal Alternates
MO Alternate Investment Advisors Private Limited (erstwhile MOPE Investment Advisors Private Limited) is a subsidiary of Motilal Oswal Financial Services Limited (MOFSL), a diversified financial services group with businesses in Securities, Asset Management, Private Equity and Investment Banking. Within MO Alternate, MO Alts is currently managing over USD 1.1 billion across four growth capital funds. The funds are focused on providing growth capital to Indian mid-market companies, across sectors such as consumer, financial services, life sciences, and niche manufacturing. Investors in the MO Alts funds have included domestic and global institutions, large family offices and HNIs, besides the sponsor Motilal Oswal Group and the investment team.

For Further details, please contact
Rohini Kute
Head Corporate Communication, Motilal Oswal Financial Services Limited