New Delhi, Oct. 20 -- TVS Capital Funds expects to make at least six investments across deeptech and manufacturing from its latest fund, according to a top executive at the homegrown growth investor. "We're going to do 2-3 in deeptech and the same amount in manufacturing. Maybe one or two more in financial services," said Krishna Ramachandran, managing partner at TVS Capital Funds (TCF), in an interview with Mint. The firm is among 14 second-level fund managers selected by the Research, Development, and Innovation (RDI) Fund to receive capital for investments in frontier sectors that India considers important to the country's sovereignty. Other funds selected in the first round include Speciale Invest's growth fund, Campus Fund, YourNest Capital, AdvantEdge and IvyCap Ventures, among others. While TCF had applied for a Rs.200 crore commitment to its latest fund, which is sized at Rs.4,000 crore, it has yet to receive formal confirmation of how much it will receive from the RDI Fund. "Our first filter is that it has to be an India-domiciled business. Secondly, it has to be a multi-decade business, not just what is relevant today," said Ramachandran. Within deeptech, the firm is focusing on more niche areas, including artificial intelligence infrastructure. Earlier this year, TCF participated in AI acceleration cloud system provider Neysa's $600 million Series B round in February, led by Blackstone, which valued the company at $1.4 billion. Other participants included 360 ONE, Ontario Teachers' Pension Plan, Nexus Venture Partners and Anchorage Capital Group. The investment in Neysa is also part of the firm's broader mandate to look at AI services businesses. This is another area in which TCF has been actively evaluating companies, the firm's other managing partner, Naveen Unni, told Mint in an interview in November last year. Other areas of interest include manufacturing and IP-based firms across defence, space and aviation. "We want to make sure there is a proper IP and they are not camouflaged a manufacturing unit with a computer control machine or a console as deeptech," Ramachandran said. Even within these sectors, the firm is more focused on companies developing products such as electronic components. TCF is willing to write cheques of Rs.300-500 crore for businesses in these areas. Of its fourth fund, TCF has so far made four investments: Neysa; Finnable, a personal loan fintech startup; Saarathi Finance & Credit, a non-bank lender that provides credit solutions to small businesses across semi-urban and rural India; and Neo Wealth and Asset Management, a wealth advisory and asset management firm in which TCF invested $53 million. The investment valued Neo at over $1 billion. The firm's maiden fund, TVS Sriram Growth Fund (TVSGF) 1A, was launched in 2008 with a corpus of Rs.585 crore, while TVSGF 1B was sized at Rs.586 crore. Its third fund received commitments of Rs.1,937 crore. So far, Fund IV has raised Rs.4,000 crore, although TCF expects to deploy about Rs.5,000 crore through co-investments alongside its limited partners. Despite its optimism about manufacturing and deeptech, TCF remains cautious about rising valuations, particularly in AI, which has attracted a large share of global investment. Unlike a venture capitalist who can sell into a rally, a growth-stage investor risks being stuck at the top. With a typical holding period of six to seven years, Ramachandran said he does not believe current valuations will deliver the multiples the firm needs....