bea.parmar@livemint.com
Mumbai
Kotak Investment Advisors Ltd (KIAL), the alternative asset arm of the Kotak Mahindra Group, plans to expand into venture capital, venture loans and buyouts, a senior official said.
“Currently, we are not in the venture capital, venture loan and buyout space. These are interesting places where Kotak wants to have a presence and thus want to build a full suite of products… On the venture capital, procurement and venture credit front, there are not many domestic big players in India and we want to enter those businesses,” KIAL Managing Director Srinivasan said in an interview.
While India’s buyout space is dominated by some domestic and several global incumbents such as Kalaari Capital, Everstone Capital, Blackstone, Carlyle Group, KKR & Co, Warburg Pincus and Advent International, venture debt investments in the country have also gained momentum. last five years. It has become a popular means for startup founders to raise capital without diluting equity. Innoven Capital, Trifecta Capital, Alteria Capital and Stride Ventures are major venture debt investors and are actively raising debt funds.
Buyouts typically occur when a buyer acquires more than 50% of a company, resulting in a change of control and ownership.
KIAL is yet to clarify its plans for buyouts and entry into the venture loan business. In addition, the Kotak investment arm also plans to raise a follow-on infrastructure fund, an angel fund and the 12th real estate fund focused on logistics and office commercial space, Srinivasan said without giving details on the size of the fund.
KIAL has already made 14 startups worth investing in 70 crores through its proprietary corpus deployed in the healthcare and healthtech sectors. “For such investments, we have filed for an angel fund of size 150 crores. We will launch it soon.”
In the venture capital space, the alternative investor will focus on healthcare and healthtech firms.
“It is already a $10 billion industry in India. We have to do things that are impactful as investors and the capital should go into it. I’m not a big fan of copying American models here. But the innate capabilities that India has are unparalleled,” Srinivasan said.
Amid the ongoing funding crunch for startups after a successful 2021 run, Srinivasan said enough entrepreneurship is underway for the venture capital space to mature.
According to him momentum investing will always be a challenge. “The market works on sentiment and liquidity. At present both are negative. Therefore, an investor should choose an investment portfolio. As of now, Kotak has handpicked investments like Pine Labs and Mobile Premier League (MPL), which have the potential to grow,” the veteran investor added.
The alternative investment firm of billionaire Uday Kotak-controlled Kotak Group was founded in 2005 and is one of the largest domestic private investment firms in the country with total assets under management of $5.7 billion. Its overall current investments are spread across various asset classes including private equity funds, real estate funds, infrastructure funds, special situation funds, listed strategies and investment advisors.
KSSF counts sovereign wealth fund Abu Dhabi Investment Authority, Singapore-based sovereign wealth fund GIC, Premji Invest owned by entrepreneur Azim Premji and parent Kotak Mahindra Bank among its investors.
KIAL is in the process of raising its second Strategic Situation Fund with a corpus of $650 million-$1 billion by October. In May, it announced plans to launch a 1,000 crore private credit fund.