International Finance Corporation (IFC) is planning to invest around $25 million in India 2020 Fund II, which is a successor fund to India 2020 fund I. The new fund has a target fund size of $125 million and focused on investing in Indian small and medium enterprises (SMEs) focused on healthcare, education, rural consumption and agribusiness.
According to the Corporation India 2020 Fund II has a target fund size of $125 million and IFC is proposing an equity investment of up to $25 million. The fund will be a Mauritius registered company, and will operate primarily through one or more subsidiaries formed in the Republic of Mauritius, which will acquire, own and operate the portfolio of investments.
“IFC's commitment will act as a stamp of approval and help mobilise other sources of capital, contributing to a successful closing. IFC's presence will ensure that ESG best practices are adhered to at the fund and investee company level. In addition, IFC has intensive experience of investing in SME's across manufacturing and services sectors and will be able to share knowledge with the fund and its investees,” said the Corporation.
The fund aims to offer growth equity and strategic and operational assistance to SMEs in India. I2F-II aims to invest $5-15 million per investment for a significant minority stake.
According to project disclosure, the investment focus will be on sectors which benefit from and promote consumer demand and purchasing power. These sectors may include, but are not limited to, healthcare and education, as well as rural consumption and agribusiness.
The Fund is a successor to India 2020 Fund I– a 2008 vintage fund of $100mm with an estimated exit Gross IRR of 30% with strong development effects on job creation, gender equality and corporate governance.
MUSE Capital Advisors Limited (Fund Manager), a private limited liability company, will act as the Investment Manager of the Fund.
