New Delhi, Aug. 19 -- Homegrown private equity firm Gaja Capital, which backs mid-market Indian growth businesses, is aiming for a valuation of Rs 2,256 crore (nearly $236 million) for its parent entity in its initial public offering that opened for subscription on Wednesday.
Gaja Alternative Asset Management, which was incorporated in 1999 but started its operations as an investment firm focussing on mid-market Indian growth businesses as 'Gaja Capital' in 2004, had filed its preliminary IPO papers via the confidential route in July last year and received approval of the Securities and Exchange Board of India (SEBI) in October 2025.
The firm received approval for its maiden secondaries fund and aims to raise Rs 1,250 crore for the same. It has also laid the groundwork to start raising its fifth flagship vehicle, targeting a corpus of Rs 2,500 crore.
As it heads for a public listing, Gopal Jain, managing director and chief executive officer, talks about the firm's future as listed entity, upcoming funds, and the evolving strategy
Edited Excerpts:
As a listed business what changes for Gaja going forward?
We've spent some time preparing for this, so it's not going to be an overnight change. We spent the last four or five years gradually preparing for this in terms of governance, processes, modelling our business, internal projections, and then trying to deliver on those projections. What is not going to change is how we run our business.
There are some positive changes that come with this, such as institutionalisation, which is the need of the hour. It brings transparency, and will help us reach out to a wider swath of potential investors.
At the same time, we will also have a much higher level of public scrutiny. So far, the scrutiny has been done by our board. We believe this would be good for our business and the sector, and India.
Post the IPO, you'll be fundraising for two new PE funds that you have received approval for, and it is not an easy fundraising environment. How do you gauge the interest?
Our business is not dependent on the IPO. Of course, our IPO depended on the business. We have a dedicated team that is pursuing our business plan.
You are talking of fundraising not being easy. Imagine how difficult it was 20 years ago, and 10 years ago. Frankly, I don't remember any time when it was easy. In every given time, the challenges change.
There's never been a time when it's been easy to raise funds in India, but I would say there are some positives now. There is domestic capital available that wasn't available 20 years ago. We now have a large set of prospects that we've built over 20 years. We have a large set of existing investors that we've built over 20 years. We have a bigger team now, and we have a track record. And in the market, whenever markets slow down from a fundraising perspective, then investors gravitate towards established managers.
One of these funds is a secondary vehicle; why go for it now? Would you focus on slightly later stage companies, and the same areas that you have previously invested from the PE vehicles?
We are keen to build a platform at Gaja Capital. We have a scale and transformation strategy. Scale is scaling up the flagship strategy. Transforming is adding new strategies, and we've chosen secondaries as the first new strategy because it's very adjacent [to existing strategies]. There's a lot of congruence between our flagship strategy and secondaries.
There's a lot of institutional memory in the team around the companies that we have looked at. We can pretty much look at the same kind of companies at a later stage. And yes, similar sectors.
Also, secondaries are maturing in India, and it is arguably the fastest growing segment of the alternatives market in India.
At the fund level, a lot of the investments have so far been in financial services, consumers, education and also software. Are there any other areas that look particularly promising going forward?
The way we have always operated is that you have to add sectors to justify increase in fund size. [We believe] you should not change strategy, but you should increase sectors. So we have consistently done the same strategy, but we have consciously increased sectors over years to increase fund size. However, it is not easy adding sectors. Eight years ago, we added software products.
Now, we are looking at deep tech very seriously. There's immense potential. Deep tech in India is still early by global standards, but it's maturing, and now we see an increasing number of growth stage opportunities. It is a world in itself with many sectors.
Are there any themes and subsectors within deeptech and AI that are catching your attention for the PE strategy?
There are interesting companies at the application level. Beyond that, we are looking at intelligent manufacturing. We have also looked at quantum technologies. We've looked at defence as a sector. Some of the sectors in which we are building coverage, and we are looking to cherry pick the best opportunity.
You now have carried interest contributing more to the topline than other revenue streams. Is it a natural function of the fund cycle or something else as well? Because it also poses risks about revenue unpredictability.
First of all, it is a natural outcome of age and maturity. If you look at the proven playbook, as firms mature, performance income increases. In our case, this year it was 60%, and last year it was 55%. It's a sign of maturity. It's a sign that we're now earning in more ways than one from the funds.
It does raise the question about predictability. What is the guarantee that such income will materialise in the future? You should look at our past and the maturity of the funds. Hopefully you will derive the same confidence that our board and we as a team have. That is we've reached a stage where we're not perfect, but we are modelable and predictable, and we have a fairly high degree of confidence. There are enough irons in the fire, enough engines firing, for us to keep up on our profit growth.
You are also looking to increase the sponsor contribution to the funds. What is the reasoning there?
We have followed the global playbook and global benchmarks. At the beginning of the firm, we have made sponsor commitments at a level much higher than the prescribed regulatory minimum. So across all the funds, the average is 6.4%. But for the latest fund, it was 8.5%. Our internal target is to increase it to 10%.
What does it do? The obvious part is that it increases returns. The not so obvious part is how it does three things: helps us attract better investors, helps us get better terms and reduces the cost of fundraising. The results are visible-we have a very high quality investor base. We have given relatively less discounts on our economics and our cost of fundraising has been arguably very low.
Do you expect cheque size for the flagship fund and secondaries fund to be greater going forward? Currently you operate in the $25-40 million (around Rs 239-383 crore) range.
What is important is to be consistent in your strategy, but allow for inflation. In fund two, the upper size of investments was Rs 75 crore. Fund four, the upper end of the investments was increased to Rs 175 crore.
So, yes, you could see the upper end inflating, but not expanding.
Given the size of the fund-in our RHP Rs 2,500 crore-and we've generally been very consistent in the number of companies, say around 10. If you take the fee out, you have 87% left for investment, and then there is a range. So yes, the answer to your question is the upper end will increase, but not dramatically to suggest that we are going after large companies. We continue to operate in the mid-market.
Published by HT Digital Content Services with permission from VC Circle.