Mumbai-based investment firm IndiaNivesh has marked the first close of its first of its kind turnaround fund called IndiaNivesh Renaissance Fund at ₹168 crore. The fund has raised ₹128 crore, with an additional commitment of ₹40 crore.
The fund is targeting a corpus of ₹900 crore for its turnaround fund, which will focus on providing capital to small and medium enterprises (SMEs) in critical need of financing. The firm will look to own significant minority stake in SMEs through capital infusion, to boost operations and optimise capacity optimisation.
IndiaNivesh Renaissance Fund will look to raise ₹300 crore from domestic investors, while ₹600 crore from international investors. The fund is managed by IndiaNivesh First Bridge Fund Managers.
The co-sponsors of the fund, IndiaNivesh and First Bridge, have contributed ₹25 crore and ₹5 crore respectively.
Sridhar Ramachandran, CIO, IndiaNivesh First Bridge Fund Managers, said, “We are looking to deploy the money in SMEs that are struggling due to business underperformance or financial stress. This is India’s first turnaround fund and such companies are just a step away from turning non-performing assets.”
The fund will look for companies with yearly revenues ranging from ₹100-800 crore. It will be investing for a period of three-five years, targeting an internal rate of return of 20%.
IndiaNivesh previously raised a ₹150 crore fund named IndiaNivesh Growth & Special Situations Fund, which is completely deployed. Some of its investments include logistics startup LEAP India, tea chain cafe Tea Post, software product company Innefu Labs, and kids wear brand Nautinati.
The latest fund will help the struggling startups to look for alternative financing option, apart from the banking institutions, to help them navigate the troubled waters.