Gaja Capital raises $130 million from International Finance Corporation, others

By Snigdha Sengupta

MUMBAI: Mid-market-focused private equity firm Gaja Capital has raised $130 million (about Rs 780 crore) as part of the first close of its third fund, called Gaja III.

The fund, launched late last year, has a final target corpus of $225 million. Anchor investors in the first close include the World Bank arm International Finance Corporation (IFC), one of Europe's largest development finance institutions, and a toptier Asian fund-of-funds. IFC has committed $25 million to the fund. “We expect to raise the rest of the fund by the first half of 2015. Nearly 40% of this fund will be invested in education companies, continuing our strong focus on the sector,” Gaja Capital founder and managing partner Gopal Jain told ET.

Gaja III follows the $180 million Gaja II raised by the firm in 2007-08. Key investments from fund II portfolio include pre-school chain EuroKids, automotive services company Carnation Auto, private sector lender RBL Bank, education and training services company CL Educate, and staffing company TeamLease.

“We are no longer invest-ing from fund II. The reserves from the fund will be used for follow-on investments in existing portfolio companies,” said Jain.

The Mumbai-based firm started its private equity run here about a decade ago with the $25 million Gaja I fund. Investments from this fund include Educomp Solutions (which it has exited), Vishal Retail and Bumi Geo Engineering.

Unlike its later funds, Gaja Iwas raised entirely from domestic investors.“About 12-14 of India’s leading business families invested in the fund. Many of them continue to be investors in our later funds,” he added.