New Delhi, Sept. 2 -- Mumbai-based financial services group JM Financial Asset Management has launched a vehicle that will invest in pre-IPO rounds, with a target corpus of Rs 1,500 crore ($157.9 million) and a greenshoe option of Rs 1,000 crore. The firm also announced the vehicle's first close.
JM Financial, which has backed companies such as Zoff Foods, BigHaat Agro, Emiza Supply Chain Services, Walko Food and online pharmacy PharmEasy's parent, has secured commitments worth Rs 700 crore in the first close, it said in a statement. Its limited partners (LPs) include ultra-high-net-worth individuals (UHNIs), family offices and institutional investors.
The fund is expected to commence deploying capital soon.
"The commitments we received at first close underline investors' growing confidence in backing companies with strong fundamentals in the pre-IPO stage. Alternative investment funds have transformed into an important avenue for wealth creation, and the pre-IPO segment is emerging as one of the increasingly important trajectories," said Vishal Kampani, vice chairman and managing director of JM Financial Ltd.
The vehicle marks an expansion of the alternatives strategy of the Nimesh Kampani-founded financial services group into late-stage investing. JM Financial launched its private equity strategy nearly two decades ago and also operates a credit strategy. The fund is managed by Ratish Varier.
The pre-IPO fund will back businesses that are expected to pursue a public listing within about 18 months. It will take a sector-agnostic approach and primarily focus on businesses with strong fundamentals, scalable business models, and attractive growth prospects.
"Our approach is to combine our deeper understanding of businesses and capital markets with rigorous research and disciplined underwriting. We will continue to identify opportunities where we can participate ahead of a company's transition to the public markets," Kampani said. "The combination of private-market capital, institutional expertise, and the country's growing entrepreneurial ecosystem is set to generate sustainable value for investors over the long term."
The PE firm is currently deploying capital from its third fund, which was launched in FY22 and closed shortly thereafter. The firm had initially targeted around Rs 1,500 crore for the vehicle, although its final close size couldn't be immediately ascertained.
Investments from the third fund include PharmEasy's parent, agricultural machinery company Balwaan, bottled water brand Clear, ad-tech firm SilverEdge, NG Electro Products, and Green Gene Enviro Protection and Infrastructure.
JM Financial PE launched its maiden PE vehicle, JM Financial India Fund, nearly two decades ago, making 13 investments, including LIC Housing Finance and GMR Airports, both of which it has since exited.
Its second fund, launched in 2017, invested in 10 companies, including Spandana Sphoorty Financial, Canpac Trends, Innovcare Lifesciences, Walko Food, BigHaat Agro, Emiza Supply Chain Services, and India Home Loan. The first and second funds had corpus sizes of Rs 1,000 crore and Rs 600 crore, respectively.
Published by HT Digital Content Services with permission from VC Circle.