India-Focused Private Equity Funds in Market - September 2012

by Aveline Tan

  • 10 Sep 2012
  • PE

Currently, 53 private equity funds (excluding funds of funds and secondaries vehicles) are on the road that solely invest in India. These India-focused funds are seeking an aggregate $8.6bn in capital commitments and, to date, almost half of these funds (47%) have held an interim close, collectively raising $1.3bn in capital commitments. The vast majority of these funds are managed by India-based fund managers (85%). Seven percent of India-focused vehicles on the road are raised by US-based fund managers and the remainder are split equally between Mauritius, Spain, UK and United Arab Emirates-based fund managers.

By aggregate target size, growth vehicles (53%) account for the majority of India-focused vehicles in market. This is followed by venture vehicles and buyout vehicles, which account for 17% and 15% of aggregate target size respectively. Thirteen percent of the aggregate targeted commitments for India-focused vehicles in market is allocated to special situation vehicles and the remainder to mezzanine vehicles.

The largest India-focused fund on the road is AION Capital Fund. The fund seeks to raise $1bn and makes special situation investments in Indian companies operating across a wide range of industries. AION Capital Fund is managed by India-based AION Capital Partners. The fund manager was co-established by ICICI Venture Funds Management and Apollo Global Management in 2011.

In terms of industry focus, clean technology is one of the more prevalent industries targeted by India-focused private equity vehicles on the road. Nineteen percent of such funds have an allocation to clean technology, with 8% seeking to invest solely in the sector. An example of one such vehicle is Nereus India Alternative Energy Fund. The fund will provide growth capital to Indian companies operating in the clean technology and renewable energy sectors.

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