Tata Capital raises $800-mn for PE fund

Tata Capital, a wholly-owned subsidiary of Tata Sons, today said it has raised $800 million for its private equity fund.

Last year, the company had said it would raise $1 billion for its private equity fund by December 2011.

"We have already raised $800 million till March 2011, against our target of raising $1 billion for private equity fund by December 2011," Tata Capital's Managing Director and CEO Praveen Kadle told reporters here.

Of the $800 million, $220 million has been raised from domestic banks and financial institutions and $580 million was raised from international investors, which includes 40% of fund from Japanese investors. The company has not yet approached the US investors, Kadle said.

"Once we get $1 billion from good quality investors, we may go beyond that figure as we have already raised 80% by March," he said.

Kadle pointed out that the company has invested $150 million, and plans to make the balance of investments over the next three-to-five-years and is looking at a return on equity of about 18%. Typically, the company remains invested for 7-10 years.

So far, the company has put money into six companies, two of which are Tata Group companies and the rest from outside the group. It has invested $30 million in Tata Technologies.

Of the $150 million, 11% has been invested in the engineering sector, 12% in autos, 21% in information technology and IT-related, 48% in consumer and 8% in healthcare, he added.

Commenting on its investment strategy, Kadle said that in line with economic growth, sectors like IT services, healthcare, education, engineering and manufacturing and logistics supported areas have good investment potential. However, it is not making investment in real estate and infrastructure sector, he said.

"We are into the fund management business and going ahead we may raise more funds," he said, adding that the firm aims to be among the top five PE fund managers in India.