TVS, Shriram group to invest in mid-cap companies

Chennai: The Chennai-based TVS and Shriram groups joined hands to put together a ‘TVS Shriram Growth Fund’, which will essentially invest in mid-cap companies in smaller towns and cities.

The Rs 500-crore corpus of the fund has been created with contributions from the two groups (Rs 50 crore each), about 450 high networth individuals and a few banks and financial institutions. The corpus has been raised from domestic investors.

Mr Gopal Srinivasan of the TVS group and Mr R. Thyagarajan, Chairman, Shriram group, said the fund aimed at making 8-12 investments over the next two years.

Investments would be between Rs 10 crore and Rs 50 crore. Typically, the size of the investee companies would be between Rs 30 crore and Rs 250 crore, they said.

“We want a meaningful minority stake,” Mr Suresh Raju, Executive Director of the Fund and a part of the investment team, said. He said the fund would look more for the project and the entrepreneur than the company itself. “We want to bet not on the horse, but the jockey,” Mr Raju said.

Mr Gopal Srinivasan noted that there are 35 cities in India with over 10 lakh inhabitants and 500 towns with a population of more than one lakh people. He was confident of finding many worthy companies to invest in.

The fund would invest in the first two years and stay invested for the next four years. From the fifth year it would start looking at exiting — either through sale of its equity to a strategic partner or another PE fund, or an IPO or a sell back to the promoter.