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Motilal Oswal Private Equity announces launch of new INR 4,000 crore (~USD 550 million) PE fund

Mumbai 20-Jul-2021

MotilalOswal Private Equity announces launch of new

INR4,000 crore (~USD 550 million) PE fund

Mumbai, 20 July 2021: Recognized recently as ‘Growth Capital Investor of the Decade’ by Venture Intelligence, Motilal Oswal Private Equity (MOPE),the private equity arm of Motilal Oswal Group, is launching its next growthequity fund – this will be the fourth fund for the home grown private equityfirm which has been investing in the Indian private markets since 2007.

The investment strategy for the new Fund, India Business Excellence Fund IV (or IBEFIV), will be in line with the previous funds as MOPE continues its focus onproviding crucial growth capital to mid-market Indian companies demonstratingstrong long-term sustainable growth potential. As in the past, the preferencewould be to invest in first-generation entrepreneurs building businesses withsignificant product and / or geographic leadership.

In terms of focus sectors, IBEF IV plans tobuild a diversified portfolio of 10 – 12 investments across MOPE’s preferredsectors of consumer, financial services, life sciences and niche manufacturing.The Fund may also evaluate & selectively invest in emerging new agebusiness models with digital / online distribution channels, within itspreferred sectors.

The Fund has been set up asan alternate investment fund (AIF Category II) registered with stock marketregulator SEBI. MOPE expects to achieve first close before December 2021 andconclude fundraising within 9-12 months.

Vishal Tulsyan, Managing Director and CEO ofMOPE commented,“The PE/VC ecosystem in India has reallycome of age over the last decade and growth equity capital will continue toplay a pivotal role as India moves from a USD 3 trillion economy to over USD 10trillion in the next decade. With our proven track record of past 15 years,MOPE has established itself as a ‘partner-of-choice’ for Indian businesses andentrepreneurs with the capability and vision to take their enterprises to thenext level. Despite the Covid-19 situation and restrictions across the country,we have been actively making new investments as well as delivering exits to ourinvestors.”

“As with our previous funds, even withIBEF IV, we will continue to pursue our time-tested investment framework ofQGLP (Quality, Growth, Longevity and Price) to back market-leading, mid-marketcompanies in our preferred sectors,” saidTulsyan

MOPE has been one of the early proponents of ‘Make in India’ and having a strong convictionaround emergence of themes such as electronics and auto componentsmanufacturing in the country, the PE firm invested in companies like DixonTechnologies, Minda Industries and VVDN Technologies. The firm also has beendistinctively able to identify winners in Tier 2 / 3 cities in India and back thoseearly, e.g., Jaipur-based AU Small Finance Bank, Udaipur-based GRInfraprojects, Indore-based Symbiotec Pharmalab, Ludhiana-based Happy Forgings,and Mysore-based NR Group (maker of ‘Cycle Agarbatti’).

Continuing with his comments, Vishal mentions,“In the Indian private equity space, wheremost of the capital has been sourced from international investors, MOPE has beenone of the few PE firms that has raised a substantial portion of the funds fromdomestic investors, in turn opening up the asset class to this investor base –~50% of the capital (excluding the group & team’s commitment) across theexisting three funds have been raised from domestic investors. Adhering to thephilosophy of “high level of skin in the game”, the group & team’scommitment to IBEF IV is expected to be 18-20%.

We are thankful to our investors for theirfaith with us in this journey so far and excited to again offer the MOPEplatform to like-minded partners across global and domestic institutions,family offices and HNIs.”

MOPE’s first fund, a 2007 vintage, INR 550crore (USD 115 million) fund made 13 investments and recently fully exited thefund with an IPO of GR Infraprojects (a leading road EPC company) which wassubscribed 100+ times, the highest oversubscription in the sector for over adecade. Other remarkable exits from Fund 1 include AU Financiers (now, AU SmallFinance Bank) and Dixon Technologies, both of which delivered more than 10xreturns. Overall, Fund 1 made 6x+returns and clocked an IRR of ~27% at the gross level in INR terms.

The PE firm’s second fund, raised in 2013, wasan INR 1,000 crore (USD 155 million) fund and made 11 investments, of which oneexit is already completed while multiple others are underway.

MOPE raised its third & latest INR 2,300crore (USD 320 million) fund in 2018 – this fund is already 90% committedacross 9 investments. Molbio Diagnostics, which fund 3 invested in at thebeginning of 2020, is the country’s largest molecular diagnostics platform and hasbeen at the forefront of Covid testing in India, since the onset of thepandemic. MOPE also invested in Bangalore-based KreditBee, one of the largestplayers in personal loan segment, marking its debut investment in the fintechspace.

Overall since inception in 2006, the privateequity firm has made 33 investments and have generated ~6x returns on its 14exits till date.

About MotilalOswal Private Equity

MOPE Investment Advisors Private Limited (MOPE)is a subsidiary of Motilal Oswal Financial Services Limited (MOFSL), adiversified financial services group with businesses in Securities, AssetManagement, Private Equity and Investment Banking. MOPE is currently managingover USD 1 billion across three growth capital funds and five real estatefunds. The three growth equity funds are focused on providing growth capital toIndian mid-market companies, across sectors such as consumer, financialservices, life sciences, and niche manufacturing. Investors in the MOPE funds haveincluded domestic and global institutions, family offices and HNIs, besides thesponsor Motilal Oswal Group and the investment team.

For further details contact:

Rohini Kute

Head – GroupCorporate Communication, Motilal Oswal Financial Services

Mobile: +91-9820196838