The Fund's primary objectives are to make available growth capital to new companies, which have shown performance, and to cater to growth and expansion of unlisted companies in the Information Technology, Bio-Technology, Retail, Auto, Agri-Tech, Health Care, Tourism, Entertainment, Logistics, Packaging and other Technology driven projects. The Fund also invests in start-ups, turn-around and buy-out situations on case to case basis. We occasionally might make follow-on investments over the life of a company, depending on its needs.
The Fund is looking for projects offering potential for an attractive growth and earnings. Some of the parameters critical for project selection are:
A strong and committed management team with a demonstrated track record and integrity.
High growth potential in the market, which the investee company seeks to serve the market will need to be quantifiably large with growth opportunities especially in emerging areas that address global markets.
The investee company should possess the ability to develop and retain a long term competitive advantage through the use of technology.
Return On Investment:
There should be a logical and visible exit mechanism available for investor that provides attractive capital appreciation with above-average profitability.
The Fund invests in the form of equity, Optionally Convertible Debentures (OCD)/ Optionally Convertible Cumulative Preferential Shares (OCCPS), etc. The exact instrument varies from case to case depending on the risk perception, the requirements of the investee company and the applicable SEBI regulations.
The Fund undertakes individual investment in the preferred range of Rs. 50 million to 150 million. Normally investment in equity is restricted to 40% of the total paid up capital of the company. Larger investment may also be considered jointly with national funds.
The Funds investment horizon varies from 3 to 7 years with the option for a quicker exit incase the situation so warrants.
The preferred exit route is through a listing on the stock exchange within 3 to 5 years, or as may be stipulated, from the date of investment.
In case a public listing is not feasible due to the reasons of size of the investment or other circumstances, the alternative method of exit consists of a sale to strategic investor, buy-outs and buyback of share by the company and promoters on the basis of a pre-determined formula and independent valuation of shares as on the date of buyback.