Kedaara Capital Aims for Record-breaking $1.7 Billion PE Fund in Booming Indian Market
- ByStartupStory | February 29, 2024
Kedaara Capital, a prominent player in India’s private equity landscape, is on the brink of securing a staggering $1.7 billion for what is anticipated to be India’s largest-ever private equity fund. This move underscores the growing interest in the nation’s rapidly expanding economy, especially as global attention pivots away from China.
The forthcoming fund, Kedaara’s fourth, is poised to be 54% larger than its predecessor in 2021, showcasing the escalating scale of investments in India. Founded in 2011 by former Temasek and General Atlantic executives, Kedaara is renowned as one of India’s premier buyout funds.
Sources reveal that approximately 80% of the fund will be contributed by backers of Kedaara’s prior funds, with an additional 20% coming from new investors, including U.S.-based entities like the Cleveland Clinic and the University of Minnesota. The fund is anticipated to focus on diverse sectors such as banking, healthcare, consumer, and software, pursuing both minority stakes and buyout deals.
“Investors were interested in committing more than $2 billion to the new fund, but Kedaara decided to cap it at around $1.7 billion so as not to strain their ability to deploy,” notes one source. Kedaara plans to finalize documentation with investors and officially announce the fund by the end of March.
Notable investors in Kedaara’s previous funds include Canada’s Ontario Teachers Pension Plan and German insurer Allianz, according to Pitchbook data.
India’s share of Asia-Pacific private equity deals surged to 23% last year, while China experienced a nine-year low of 31%, as per a report by consultancy firm Bain. Kedaara’s previous funds, totaling $2.4 billion between 2011 and 2021, were invested in 27 Indian companies, including Lenskart and Mahindra Logistics, reflecting the fund’s strategic market positioning.
Kedaara’s successful track record includes regular stake sales, with profitable returns benefiting investors. For instance, in 2019, Kedaara realized a 3.5 times return on its investment by selling its remaining stake in Mahindra Logistics on the stock market.
Two of Kedaara’s portfolio companies, Avanse and Perfios, are reportedly gearing up for stock listings this year, providing Kedaara with the option to further capitalize on its investments.
India’s heightened appeal as a destination for private equity investments continues to grow, fueled by Western firms diversifying away from China amid escalating trade and economic tensions between Washington and Beijing.
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