New Delhi, July 24 -- The National Investment and Infrastructure Fund (NIIF) has added a non-bank lender to its portfolio of direct investments as it placed a new bet alongside a private equity fund manager that it backs as a limited partner, VCCircle has gathered.

NIIF, the quasi-sovereign wealth fund anchored by the Indian government, is investing up to Rs 210 crore (around $22 million) in Mumbai-based Viksit Capital Pvt Ltd along with PE firm Vixar Partners.

The development comes soon after NIIF, which manages one of India's largest infrastructure funds, struck a deal to exit non-bank lender Aseem Infrastructure Finance by selling its stake to a group of investors led by PE firm TPG.

VCCircle could not independently ascertain Vixar's contribution in the latest investment. Neither Vixar nor Viksit Capital responded to VCCircle queries till the time of publishing this article.

Viksit Capital was earlier known as IREP Credit and rebranded last month. Vixar, which was started by former Carlyle India head Rajeev Gupta and acts as the general partner (GP), was formerly known as Arpwood Partners.

Last year, VCCircle reported that Vixar acquired a controlling stake in IREP Credit. Vixar bought a tad less than 76% stake in IREP Credit while the Narotam Sekhsaria Family Office purchased a little more than 14%, VCCircle has gathered. IREP Credit CEO Naresh Naik controlled the remaining stake.

VCCircle couldn't immediately ascertain the size of the stake that NIIF is picking up in the lender.

Viksit Capital focuses on providing secured business loans to MSME borrowers in semi-urban and rural areas for working capital and business expansion. It has 100 branches across Andhra Pradesh, Telangana, and Karnataka with assets under management of Rs 475 crore.

As for Vixar, the PE firm specialises in control deals for mid-market businesses. Apart from Viksit Capital, its portfolio includes housing finance company Sitara, and healthcare companies Daignostix and Sterling Hospitals. The PE firm had acquired a majority stake in Sterling in 2022.

The PE firm, which has raised only one fund since inception, previously exited its investment in MSME-focussed non-bank lender SBFC Finance. Vixar had invested in SBFC Finance in 2017. The PE firm partly exited the investment in 2023 through the company's initial public offering and fully in 2024 through stock market sales.

NIIF

NIIF made the co-investment in Viksit Capital via its second private market fund (PMF-II). The deal is in line with the private market strategy, wherein it acts as a limited partner to private equity and venture capital firms and also makes co-investments alongside them.

In March, NIIF announced that PMF-II had secured commitments of up to $750 million. The fund, whose target corpus is $1 billion, has made three investments since the initial close, including in Viksit Capital.

NIIF's $600 million Private Markets Fund I (PMF I), is now fully invested and has already realised about 40% of its investments. The fund's investments include the integrated healthcare ecosystem Geri Care, and the multi-specialty tertiary healthcare chain SRV Hospitals among others.

Overall, the private markets business has invested in 10 funds, with exposure to around 85 investments across eight key sectors. The private market strategy's focus areas include mid-market, control, and venture capital funds.

NIIF's other strategies include growth equity, and climate investments in the India-Japan business corridor.

Published by HT Digital Content Services with permission from VC Circle.