IFC invests $60 million in Motilal Oswal

Business Business:The International Finance Corporation has invested $60 million in Motilal Oswal Alternates’ fifth fund, which will allow it to co-invest in the Indian private equity firm’s portfolio companies.

This is the World Bank Group company’s third and largest equity investment in the MO Alternates fund.

The India Business Excellence Fund VG managed by MO Alternates focuses on middle-market companies in the consumer, financial services, life sciences and manufacturing sectors. IFC’s investment in it comes with a co-investment envelope of $60 million that will allow it to invest in companies alongside MO Alternates’ latest fund.

Equity co-investments enable banks like IFC to invest in future investments made by a venture capital or private equity firm without paying high fees.

Mohamed Gouled, IFC’s vice president for industries, said in a statement, “IFC’s investment aims to leverage private capital and solutions to boost job creation, promote inclusive and sustainable growth, and support India’s transformation into an upper middle-income country.” The India Business Excellence Fund VG Fund has a target corpus of $750 million, with a greenshoe option for an additional $150 million. Over the fund’s lifecycle, MO Alternates plans to invest in 12-16 mid-market companies. It will target companies operating not only in India’s large cities but also in low-income states as well as tier-2 and tier-3 cities. “IFC’s investment in the fund sends a powerful signal to other investors, especially institutional investors, to invest in India,” Vishal Tulsyan, managing director and chief executive officer of MO Alternates, said in a statement. He added that the investment will encourage local fund managers to raise funds for investing in India’s underprivileged regions.