TVS Capital and Shriram launch Rs 500 cr PE fund

Resource mobilisation for the fund is nearing completion, TVS and Shiram Group have invested Rs 50 crore each, other investors include High Networth Individuals (HNIs) -- Rs 220 crore, institutional investors - Rs 120 crore and group companies -- Rs 60 crore.

The company has set a target to invest in six to eight companies in the next 12 months and will be focusing on Tier II and III cities in Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Maharashtra, Gujarat and National Capital Region (NCR), said Gopal Srinivasan, chairman and managing director, TVS Capital Funds. The target companies should have a topline of about Rs 30 crore to Rs 250 crore and proven business model that require equity growth capital.

The investment size will be Rs 10 crore to Rs 50 crore with a time frame of four years and the TVS Capital will pick a stake of 20 to 25 per cent and will seek for a director seat in the board. After we have done 4 to 5 deals, we will be looking to raise additional corpus of Rs 500 crore, Srinivasan said.

Suresh Raju, general partner, TVS Capital Funds said that the fund would be looking at return of 20 per cent to 25 per cent after four years. The ideal exit mode would be through selling stake to a larger PE Fund, IPO, strategic sale and selling stake back to the promoter, he added.