Motilal Oswal Private Equity to launch new fund of Rs 4k crore - Check important details here

Motilal Oswal Private Equity (MOPE) on Tuesday announced the launch of a Rs 4,000 crore or USD 550 million fund, which will invest in mid-market companies showing high potential of growth.

This will be the fourth fund from the company, which is the private equity arm of the Motilal Oswal Group, which counts equity broking as its flagship business.

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The 'India Business Excellence Fund IV' investment strategy will be the same as earlier with a focus on providing growth capital to mid-market Indian companies demonstrating strong long-term sustainable growth potential, according to a statement.

There will be a "preference" to back companies floated by first-generation entrepreneurs, it added.

MOPE is targeting for a first close before December 2021, and conclude fundraising within 9-12 months, the statement said, adding the fund will make up to a dozen investments meaning an average deal size of over Rs 400 crore.

The company launched its first fund in 2007 and has so far raised Rs 3,850 crore across the three earlier funds. The maiden fund made a full exit recently and has achieved 6x returns with a 27 per cent internal rate of return (IRR).

Since its inception, the company has made 33 investments and generated over 6x returns on its 14 exits to date, the statement said.

Some of its bets across the journey include AU Financiers, GR Infraprojects, which listed this week, Molbio Diagnostics, among others.

The company's managing director and chief executive Vishal Tulsyan said it has been actively investing despite the COVID-19 pandemic and the new fund will also focus on the tested formula of sticking to quality, growth, longevity and price while writing a cheque.

Tulsyan said 50 per cent of the capital (excluding the group and team's commitment) across the existing three funds have been raised from domestic investors.

The statement said the group and team will invest up to 20 per cent in the new fund to have its skin in the game.