Motilal Oswal PE invests Rs 2 bn in Ludhiana-based firm Happy Forgings Ltd

Motilal Oswal Private Equity (MOPE), through its third private equity fund, India Business Excellence Fund - III, has committed Rs 2 billion to Ludhiana-based forging and machining firm Happy Forgings Ltd. 

The funds would be utilised for greenfield expansion and addition of new forging presses to improve share of value-added products, the promoters of the company said. MOPE has raised around Rs 23 billion ($325 mn) for its IBEF III fund, from which this investment has been made.

Vishal Tulsyan, managing director and CEO of MOPE said, "Manufacturing has been one of the focus areas of our Fund as it is expected to benefit from strong underlying growth in the Indian economy as well as significant export opportunities. Commercial Vehicles, Capital Equipment industry would be the key beneficiaries of this trend and are expected to grow 3x-4x over the next decade."

Established in 1979 by Paritosh Kumar Garg, Happy Forgings Ltd manufactures components, including crankshafts, a safety critical component for the automotive industry. Its product range also includes steering knuckles, transmission gears, suspension assemblies, locomotive parts etc. The company has a forging capacity of 60,000 MT and machining capacity of 20,500 MT which helps serve customers across multiple end-user industries including commercial vehicles, capital equipment, tractors, railways and exports.

MOPE is managing three funds at present, including India Business Excellence Fund III (IBEF III), focusing on providing growth capital to mid-market companies, typically in the range of Rs 1-3 billion, across sectors. 

IBEF, launched in 2007 is a Rs 5.50 billion fund and is fully invested in thirteen portfolio companies across sectors such as food processing, bulk packaging, power transformers and power infra enablers, ITES, financial services, EMS, FMCG, auto components, etc. Out of the thirteen investments it has already made eleven exits.

IBEF II, launched in 2012 is a Rs 10 billion and is fully invested in eleven portfolio companies across sectors such as financial services, life sciences, niche manufacturing and consumption based sectors.

MOPE is expecting the company to grow by 25-30 per cent in the next few years.