ValueQuest raises Rs 1,500 crore from domestic LPs with eye on advanced manufacturing growth

ValueQuest Investment Advisors has raised Rs 1,500 crore for its private equity (PE) fund focused on advanced manufacturing sectors such as aerospace, defence, and energy transition.

ValueQuest Tristar, a 100% rupee-denominated fund, has surpassed its target size of Rs 1,500 crore and has activated its greenshoe option of Rs 500 crore, said Aniket Dharamshi, managing director and fund manager of the Mumbai-based alternative investment manager. It aims to close the fundraise within the calendar year.

The fund plans to back 8-12 companies with cheque sizes ranging between Rs 150-400 crore, and expects to complete the capital deployment within 18-24 months.


“We look for businesses that already have proven product-market fit, positive unit economics, and established customer relationships,” Arvind Ananthnarayanan, Tristar’s fund manager, told ET. “We do not underwrite loss-making ideas. Instead, we fund capex and working capital for scale-up.”

ValueQuest believes it’s the right time to deploy capital in advanced manufacturing sectors and noted that such firms are also tapping the IPO market. “There are multiple examples of aerospace and defence companies listing and continuing to scale through public markets,” Ananthnarayanan said.

The fund has already invested in Rangsons Aerospace, a precision manufacturing company serving marquee domestic and global aerospace and defence clients. It has also backed Waaree Energy Storage Solutions that manufactures lithium-ion cells, battery packs, and energy storage systems for both Indian and international markets.

On defence investing, Ananthnarayanan said the fund has been an early investor in defence public sector undertakings like Mazagon Dock, Cochin Shipyard, HAL, BEL, and Garden Reach, even before policy momentum built up in favour of the sector.

PE lens on advanced manufacturing

Arguing that capital naturally flows to sectors where “opportunity and profits lie,” Dharamshi said PE firms are likely to increasingly pivot towards advanced manufacturing in aerospace and defence.

Unlike SaaS businesses where capital is often used to provide founder exits rather than fund growth, manufacturing requires tangible investment in capex, machinery, land, buildings, and working capital, he explained.

“Over the past five to six years, India has seen a meaningful revival in manufacturing, with many VC-backed companies now reaching a stage where they are ready for private equity capital,” he added.

In January, Norwest Venture Partners made its first bet in advanced manufacturing, backing aerospace components manufacturer JJG Aero through a $30 million round.

Dharamshi feels India may require between Rs 2.5-10 lakh crore over the next decade to build manufacturing capacity, “Not to beat China, but to compete meaningfully.”

He also pointed to the significant capex cycles underway at conglomerates such as Reliance, Adani, JSW, and Tata as evidence that the broader economic direction is clearly tilted towards manufacturing-led growth.