Aditya Birla fund reaches $150m first close

The private equity arm of India’s Aditya Birla Group has raised the amount entirely from domestic investors. The fund will target substantial minority investments in unlisted, mid-market companies including infrastructure enablers.

Aditya Birla Private Equity has garnered commitments of more than INR6.75 billion ($148 million; €103 million) for the first close of its maiden private equity fund, significantly more than the INR5 billion it was targeting.

The fund has been in the market since July 2009 and has raised the amount entirely from domestic investors. It is targeting commitments of $250 million from domestic and international investors for its final close.

The growth capital fund will make investments that can benefit from opportunities created by the strong growth of the Indian economy, the firm said. The fund will target substantial minority investments in unlisted, mid-market companies and will largely be concentrated on sectors including infrastructure enablers, logistics, healthcare, education and hospitality. It will also seek opportunities in other sectors that are based on the theme of domestic consumption. 

Parent company Aditya Birla Group has made a commitment of $100 million to the private equity business as a whole. In this fund, it will commit 20 percent of the total amount raised as the anchor investor, Bharat Banka, managing director and chief executive officer of the firm, told PEI Asia last year. The group will commit the remainder of the capital to subsequent funds.

The firm’s average investment size is between $20 million and $25 million per deal, going up to a maximum of $50 million. Two investments it had made on behalf of the Birla family office have been transferred to the private equity fund. These are the acquisition of a minority stake in the Bombay Stock Exchange and the purchase of a 26 percent stake in retail chain V-mart.

The $30 billion Aditya Birla Group has interests in the mobile telecom, financial services, natural resources, business process outsourcing and branded apparel sectors among others.