Indian private equity firm TVS Capital Funds, which has backed companies such as PhonePe and Vivriti Capital, is looking to sharpen its focus on financial services and technology deals following the recent close of its fourth and largest fund at Rs 3,500 crore ($409 million).
Along with co-investments, TVS Capital aims to deploy over Rs 4,500 crore ($526 million) from the fund.
From its fourth fund, TVS Capital aims to pursue larger deal sizes, typically in the Rs 300-500 crore range, and is open to taking 40% or higher stakes in portfolio companies, signalling a move toward more influential ownership.
“In Fund III, we held stakes of 4-6% in some companies and up to 10% in others. With Fund IV, we are planning for Control and Transformation Opportunities (CTO), whereby our stake would be 40% or higher,” said Krishna Ramachandran, Managing Partner, COO & CFO of TVS Capital Funds, in an interview with DealStreetAsia.
Founded around 18 years ago, TVS Capital has backed nearly 30 companies. Its portfolio is heavily skewed towards financial services and includes startups such as InsuranceDekho and Five Star Business Finance.
Its past and current investments include high-profile names like Digit Insurance, Nykaa, NSE India, SarvaGram, and MedPlus Health Services. It exited Nykaa in 2018 and has partially exited positions in Digit, MedPlus, and Five Star Finance.
Excerpts from the interview with Krishna Ramachandran:
