As India’s homegrown private equity (PE) giant ChrysCapital prepares to deploy capital from its record-breaking $2.2 billion Fund X, partner Gaurav Ahuja reflects on how the firm has evolved since its inception in 1999.
“Our initial focus was on early-stage venture investments, bringing proven US business models to India… however, we quickly realised the market wasn’t ready,” he said. “We pivoted to sectors like IT and financial services, which became the backbone of our early success.”
From a modest $64 million fund in 1999, ChrysCapital has today grown into a diversified platform spanning IT, financial services, healthcare, consumer, and manufacturing, with control and buyout deals forming a major part of its portfolio.
Ahuja added, “Over the first 15 years, we focused on minority stakes with exceptional entrepreneurs. Today, control and buyout opportunities make up a significant part of our portfolio, reflecting broader shifts in the Indian PE market.”
ChrysCapital’s Funds VI through VIII consisted of roughly a quarter control stakes, while Fund IX was about evenly split between minority and control positions. The firm expects Fund X to follow a similar pattern, signaling its adaptation to the changing dynamics of the Indian private equity market.
For the first time, ChrysCapital has also raised capital from domestic LPs, highlighting the growing confidence of India’s own capital base in backing homegrown PE managers.
ChrysCapital closed its tenth fund last week, bringing its total fundraising across PE funds, a public markets fund, and a continuation vehicle to roughly $8.5 billion.
Of the $2.2 billion corpus it raised, roughly 15% came from institutional investors and professionally managed family offices in India.
The firm counts dessert chain Theobroma Foods, e-commerce platform FirstCry, eyecare chain Centre for Sight, and The National Stock Exchange among its portfolio firms.
Edited excerpts from an interview with Ahuja:
ChrysCapital has been investing in India for over two decades. How has the firm’s strategy and focus shifted across different economic environments, and what key phases have marked its growth?
ChrysCapital began in 1999 with a modest $64 million fund, largely raised from friends and family, a true ‘faith capital’ start.
Our initial focus was on early-stage venture investments, bringing proven US business models to India, which we called ‘concept arbitrage’. For example, we backed e-commerce and job portals similar to eBay and Monster. However, we quickly realised the market wasn’t ready: low credit card and internet penetration meant timing was off.
During our first fund, we pivoted to sectors like IT and financial services, which became the backbone of our early success.
As we progressed through subsequent funds, we added pharma, consumer, infrastructure, and manufacturing while doubling our fund size with each cycle.
By fund five, which we raised just before the global financial crisis [in 2008], we learnt a critical lesson: capital-intensive sectors such as infrastructure and manufacturing suffered during high interest rates and inflation, while high-return, asset-light sectors like IT, financial services, pharma, and consumer proved resilient.
From that point, we decided to focus on sectors with strong growth and high returns on capital.
Over time, our approach to investments evolved as well. The first 15 years were largely about minority stakes with exceptional entrepreneurs.
Today, control and buyout opportunities make up a significant part of our portfolio. To support this shift, we have also built a dedicated portfolio operations team that works hands-on with our companies to accelerate growth, optimise costs, and professionalise operations. This allows us to take on larger control investments while adding real operational value.
Initially, we also participated in many public deals (PIPE). However, as our focus evolved, we decided to separate the two strategies.
About five years ago, we established a dedicated public markets strategy, allowing us to invest in India’s public opportunities, while our private equity team continues to focus exclusively on private deals.
Looking back, our journey has been about learning, pivoting, and deepening. By deepening, I mean going beyond sectors to invest in subsectors with strong growth potential.
In financial services, for instance, we expanded from lending to include non-lending businesses such as exchanges, asset management, and insurance.
In healthcare, we moved from pharma to broader services, including hospital chains and specialty clinics. Similarly, in consumer, we evolved from traditional FMCG to ‘new economy’ businesses leveraging technology for distribution and customer engagement.
You mentioned your growing focus on control deals. How do you see this shift in the Indian PE market, and what opportunities does it create for ChrysCapital as you close Fund X?
Of late, there has been a rise in control deals, with promoters increasingly open to divesting significant stakes. And yes, it’s an industry-wide trend.
A decade ago, control and buyout deals accounted for only around 10% of the market; today, they represent about a third. The mix is clearly shifting, with buyouts taking a larger share, and our strategy has evolved in line with this trend.
In our earlier funds, we had very few control transactions. Funds VI through VIII were roughly a quarter control, while Fund IX, the most recently invested fund, was about evenly split between minority and control.
We expect Fund X to be in a similar range. Having said that, our focus is on backing the best opportunities, whether minority or control – it really depends on the deal flow. There are no fixed quotas; we remain flexible and opportunistic, prepared to act where we see the greatest potential.
ChrysCapital has traditionally focused on established sectors. With Fund X, are there any new sectors you are looking to explore?
We are always evaluating new areas, including what we call ‘new economy’ businesses. When we first explored these sectors, it was largely to understand how emerging business models could impact or enhance our existing investments. That initial learning exercise evolved into a formal sector strategy, allowing us to identify market leaders worth backing.
For example, in manufacturing, we are closely following the EMS space [Electronic Manufacturing Services] and capital-light industrial businesses.
Our philosophy has always been to understand a sector deeply before committing capital. We constantly engage with companies to learn about new sectors, define strategies, and identify underappreciated opportunities.
This is the first time ChrysCapital has raised capital from domestic LPs. How do you see the rise of domestic capital shaping India’s private equity landscape, and what opportunities or changes does it bring to the industry as a whole?
As India’s economy and entrepreneurial ecosystem mature, we’re seeing remarkable shifts in the landscape.
The number of IPOs and control deals has risen sharply, creating significant liquidity for founders who have built exceptional businesses. This has, in turn, driven the rapid growth of professionally managed family offices, giving business families the ability to diversify and compound wealth beyond their operating companies.
These trends – rising wealth, higher liquidity, and the emergence of organised family offices – made it a natural time for us to raise capital from India.
Like any business, we aim to maintain a diversified investor base, mindful that geopolitical or macroeconomic factors can affect regions differently. Adding India as an investor geography was both strategic and timely.
We believe this trend of domestic participation will only strengthen. As liquidity deepens, more founders and family offices will look beyond public markets and traditional assets to participate in private equity.
How did you decide on the $2.2 billion fund size? Given that it’s the biggest amount raised to date by a PE firm, what were your considerations, especially since ChrysCapital returned about $300 million from its $1.15 billion Fund V after the global slowdown?
When we think about fund sizing, it really comes down to a few factors. First, the market opportunity — India’s private equity space has been growing rapidly, so the opportunity set is strong.
Then we look at our own capacity — the pace at which our team can source and deploy capital. Portfolio construction is key too: how many companies we want to back, average cheque size, and deployment cycle. If you’re deploying about $500-600 million a year over four years, it naturally points to a fund size of around $2-2.5 billion.
From a fundraising perspective, the timing also felt right. India today is a bright spot globally – strong growth, controlled inflation and fiscal deficit, and healthy corporate and bank balance sheets. And finally, investors value the consistency of our platform – 25 years, nine funds, and a very stable team, with several partners and directors who’ve been with the firm for over two decades.
What are your views on the overall exit market? While the IPO market is bustling, how do you assess M&As and secondary transactions?
There is a lot of depth in the public market today. In my view, fresh IPOs will continue to come, and how they perform post-listing depends on each company’s fundamentals — growth potential, quality, and sector dynamics.
For example, even with companies we priced conservatively, post-IPO performance can differ widely.
This makes public markets an exciting new exit avenue for Indian PE investors. At the same time, control deals remain active. For instance, we sold GeBBS, a healthcare cycle management company, to EQT last year, generating almost six times our investment from over a dozen non-binding bids.
So, overall, all avenues are open, and GPs now have multiple options to choose the best path for value creation, unlike in the past when exit routes were more limited.
